Bleeding Bitcoin Is Waiting For A Hero in the Cryptoverse!
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| Bleeding Bitcoin Is Waiting For A Hero in the Cryptoverse! (Image Credit: Pexels) |
Who is able to save bitcoin?
The biggest cryptocurrency in the world never seems to have a good day. It appeared to be recovering strength this month after collapsing in June, breaking $25,000 for the first time, but then fell back to under $20,000.
The market now needs to answer the Big Bitcoin Question: where will a true rally come from? after a deflated finish to August.
As institutional players shiver in the face of a macro storm, stoic retail investors appear to be the most likely source of solace right now.
According to Chainalysis statistics, the amount of "illiquid bitcoin" on the market, which is bitcoin kept by wallets that rarely spend or trade, has increased by 73,840 bitcoin over the past week, the greatest weekly gain in more than two months.
When converted to today's pricing, that comes to about $1.7 billion.
Additionally, according to Chainalysis, the number of bitcoin held for more than a year has climbed by 54,300 on average over the past four weeks, the biggest increase in roughly four months.
In the meanwhile, cryptocurrency exchanges!
According to Jay Fraser, head of strategy at BSTX securities exchange, "it's evident that longer-term holders at the retail level are also collecting, and the number of wallets holding very tiny sums of bitcoin is indeed expanding."
Don't undervalue the influence of the retail HODLers, Fraser cautioned, referring to a group whose moniker was first coined years ago when a trader typed "hold" incorrectly on an internet forum.
Their failure to sell contributes to the rise in scarcity, which eventually leads to another supply shock for bitcoin.
Institutions "DRIVE DOWN" the market
What about those wealthy institutional players that bought into cryptocurrencies while they were trading for a profit?
Some market players claim that these large investors have been the main cause of the recent crypto downturn and that they have been selling aggressively.
According to Coinshares data, the digital asset investment products favoured by traditional institutional financial institutions experienced withdrawals of about $9 million in the week ending August 19—the week that saw bitcoin decline once more.
According to Ed Hindi, chief investment officer at Tyr Capital Partners, "the latecomers—institutions that came in close to the highs or the $30,000 to $50,000 levels—those are the ones that drove the market down, basically."
As another proof of institutional bearishness, Hindi cited a significant gap between the prices of futures contracts and the spot price of bitcoin on the CME platform.
According to Arcane Research analysts, the discount for the most actively traded contract dropped to an all-time low of 3.36 percent last week.
Ready to purchase the dip
But don't write off institutional investors just yet; there's plenty of evidence they haven't given up on bitcoin, which is down a staggering 70% from its November all-time high of $69,000 and down 56% since the year's beginning.
Some market observers view BlackRock's plan to introduce a private bitcoin investment product designed particularly for institutional investors as evidence that demand is still robust and might lift cryptocurrencies out of their current slump. BlackRock is the largest asset manager in the world.
Swan Advisor Services' managing director, Andy Edstrom, claimed that despite some "fair weather enthusiasm" waning, his company had continued to see interest from financial advisors and their clients in bitcoin investments.
