The cryptocurrency market is not the way it used to be anymore, no, not at all! As weak-handed bag holders get shaken out and institutional investors wait for regulatory decisions (and the floor), the market for digital currencies is shifting dramatically — and for the better.
Shaking out the Weak Hands
In December, everyone was a day-trading cryptocurrency expert.
Stories abound about co-workers who convinced their mothers to buy ten litecoins at $350 apiece, and everybody probably knows somebody who bought PACcoin when it pumped nearly 40,000 percent in little more than a week.
Most of those investors have since left the market with heavy losses, some surely vowing never to touch the stuff again — and that’s not a bad thing. Explained Nigel Green, founder and chief executive of deVere Group, to MarketWatch:
It has been this correction that’s been mainly responsible for an evolution in investor attitude. I believe that now the overwhelming majority of investors do not view cryptocurrencies as a way to make a fast buck, as perhaps previously many more might have done.
What that means, in Green’s estimation, is that major market players and altcoins with legitimate value are set to see the most interest from core cryptocurrency proponents and institutional investors. Green called the change a “seismic shift,” claiming:
Rather, they are now investing in Bitcoin, Ethereum, Ripple, Dash and Litecoin, among others, as they can see the core value over a longer time horizon.
Green is not alone in his estimation of the changing cryptocurrency market. CryptoCompare co-founder Charles Hayter agrees, telling MarketWatch:
Speculative money that was pumping into the space has almost left. Although the market is subject to behavioral whims it won’t be in such state of flux as investors reposition.
As weak hands exit the market, institutional investors are waiting for the right entry point — presumably the floor — while also taking a wait-and-see approach to various countries’ regulatory standpoints on the emerging market. Green told MarketWatch:
There is a growing sense, especially since the recent G-20 summit, that regulation of the cryptocurrency sector is now inevitable – and this, along with growing acceptance in the business and finance community, is giving today’s investors more long-term horizon confidence.
What do you think about the shifting cryptocurrency market? Do you think less weak hands and more institutional investors will provide a more solid foundation for the future? Let us know in the comments below!
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