24.07.2021

How cryptocurrency investors reacted to Bitcoin’s sharp crash

Large investors with millions of dollars in funds, often referred to as institutional, are “responsible” for Bitcoin’s skyrocketing growth in the past few months. They actively bought cryptocurrency without plans to sell it later, that is, they seriously increased the demand for BTC.

However, the rise in price of the first cryptocurrency slowed down, as on the eve of its value fell from about 40 thousand to 31 698 dollars. Scott Minerd, CIO at Guggenheim Investments, said during the general euphoria in the market that “Bitcoin’s parabolic growth could be interrupted in the short term.” As you can see, the market really fell. How did other major players react to this event?

We checked the actual data: today, Bitcoin is trading at $ 33,873, which is 5.9 percent lower than a day ago. At the same time, the market collapse took place from Sunday to Monday. In this segment, the cryptocurrency rate dropped below 32 thousand dollars – this is noticeable on the chart.

Note that there is nothing wrong with the fact of correction, that is, the market sagging. According to analysts, growth cannot continue indefinitely, and cryptocurrencies also need to consolidate – to stand at the same level in order to collect a sufficient base of buyers and create a tight level of support.

Numerous drawdowns also occurred in 2017, when Bitcoin grew from $ 1 to $ 20 thousand. These moments are noticeable on the chart, and there were quite a few of them. This is how BTC moved in 2017.

What will happen to Bitcoin next

Recall that Minerd and his fund are directly related to the digital asset market. Back in November, the company’s management announced its desire to invest more than $ 530 million in Bitcoin. This happened against the background of how large world-famous companies have already invested huge sums in coins. More details on the list of those who distinguished themselves can be found in a separate article.

Former White House communications director Anthony Scaramucci, who now runs a fund called SkyBridge, said on Twitter that he is using the recent Bitcoin crash as a lucrative cryptocurrency investment opportunity. The founder of Castle Island Ventures, Nick Carter, noted that even after Bitcoin’s rise to $ 40,000, he “feels almost nothing.” Perhaps some of the same will be felt when BTC increases up to 100 thousand dollars. Here is an investor quote from Decrypt.

After witnessing a 50 percent drop in Bitcoin last year to nearly $ 3,000 in 24 hours in a decidedly mature market, nothing bothers me anymore.

By sensations, Nick means emotions – the main enemy of any trader and investor. Thus, he makes it clear that the current Bitcoin drawdown is normal. In addition, it did not surprise him.

Accordingly, Carter is quite confident that the market will continue to grow to at least hundreds of thousands of dollars. Eric Wall, CIO of the Arcane Assets Foundation, shares a similar opinion. On his Twitter account, he stated that the recent Bitcoin crash is “just noise” on the chart:

Scaled down, the fact that Bitcoin could crash to $ 30,000 is so optimistic that it can hardly be overestimated. A fundamental new phenomenon is taking place where Bitcoin is being marketed as a class of real assets comparable to gold. This is a trend that has just begun to move.

The head of the research department of the cryptocurrency broker Bequant, Denis Vinokurov, dodged all the journalists’ questions and summarized his thoughts with the following quote.

Cryptocurrency funds are usually accustomed to sharp surges in volatility.

Volatility refers to the volatility of rates, that is, their abrupt changes.

As you can see, large players feel quite confident even after the main cryptocurrency collapse. In fairness, the collapse itself is so far not so critical, because in 2017 the Bitcoin price experienced much more serious drawdowns on the way to a new historical maximum. For example, on November 8, BTC was valued at $ 7461, and on the twelfth, the rate was $ 5866. And all this for a month and a half before the then record 20 thousand dollars.

We believe that the main thing here is the fact that large investors are not going to get rid of their coins, so in the long term, such market movements should continue. Yet growth stages usually last at least a year, which means that what is happening today may well be just the beginning.

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