After last week’s disastrous decline, this week, bitcoin bulls seem to have returned. On Monday’s U.S. session, bitcoin returned to above $49,000 per coin, expanding to 8% intraday, up nearly $6,000 from the daily low; ethereum broke through $1,550 per coin, up 9.02% intraday.
After the plunge, “predators” re-entering the field?
Over the weekend, it was reported that bitcoin prices plummeted because investors decided to take profits on risky assets after U.S. bond yields spiked. However, it appears that institutional demand for bitcoin continues as the price remains under pressure.
In last Thursday’s correction, nearly 13,000 bitcoins were pulled from Coinbase, with most of the supply in cold storage. Ki Young Ju, CEO of CryptoQuant, noted that the Coinbase premium has turned positive, indicating that institutions are buying on the Coinbase Pro platform. the Coinbase premium is the “the difference between the Coinbase Pro price (USD trading pairs) and the Coinbase price (TEDA trading pairs), and when the premium is high, there is a lot of spot buying pressure from Coinbase.”
The Block Research crypto trading data shows that cryptocurrency trading volume exceeded $1 trillion in February, setting a new record. Monthly trading volume was $1.05 trillion as of Feb. 26, an increase of $143.9 billion, or 15.9 percent, from January.
Citi’s team of analysts said Bitcoin is at a “tipping point” where it could either become the preferred currency for international trade or face a “speculative implosion. In the report, Citi said bitcoin could be at the beginning of a big transition into the mainstream after recent traction with companies like tesla and MasterCard.
“There are many risks and obstacles in Bitcoin’s path, but weighing these potential obstacles against the opportunities, the conclusion is that Bitcoin is at a turning point.”
Institutional investors have become increasingly involved in bitcoin in recent years, whereas for the past decade, it was primarily a large number of retail investors who were involved in bitcoin trading. If businesses and individuals can access the digital cash and so-called stablecoins being planned by central banks through digital wallets, bitcoin’s global reach, traceability and potential for fast settlement are features that will greatly broaden its commercial applications.
Notably, Citi also noted that a wave of frenzied bitcoin speculation has led to pressure on Gold prices. The bank noted that some retail and institutional investors have turned to bitcoin and other digital currencies, which may have exacerbated the weakness in gold prices and the recent rate of outflows.
“Bitcoin and other digital currencies appear to be taking market share from gold, but that does not mean that digital currencies have the same characteristics as gold.”
Bitcoin Market Threatens to Spiral Out of Control if Anonymous Bitcoin Creator’s Identity is Released
GoldTen reported last week that Coinbase was publicly listed on the Nasdaq Stock Exchange through a direct listing.
The digital trading platform lists Satoshi Nakamoto, the creator of Bitcoin, as a risk factor in the filing, the foreign outlet noted. Satoshi Nakamoto is a pseudonym used by the creator or group of creators of Bitcoin. The document says that if the creator’s identity is disclosed, then it could lead to a deterioration in the price of Bitcoin.
Additionally the document mentions Satoshi Nakamoto’s personal bitcoin reserves, which total more than 1 million. As of press Time, one bitcoin is worth about $48,000.
Coinbase says that if Satoshi Nakamoto decides to transfer his more than $30 billion worth of bitcoins, it could negatively impact Coinbase and could destabilize the entire crypto market.
Bitcoin’s value is driven in large part by its deflationary tendencies. If these 1.1 million bitcoins were to enter the market, the price of this digital currency would almost certainly fall.
Again, Bitcoin is praised for its decentralized nature. If Satoshi Nakamoto is revealed, then this currency will be placed under a single entity, which may deter traders who buy into this currency for the sake of decentralization.
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