Unless you’ve been hiding under a rock today, you’ve certainly noticed that Bitcoin is up (to say the least) — and you can probably thank Wall Street.
‘Nothing New for Bitcoin’
At 1 PM CET today, the price of Bitcoin rocketed up from just under $7000 to just over $8000 in less than one hour. It doesn’t take an expert market analyst to guess that such price action for the world’s dominant cryptocurrency the result of institutional investors with fat purses. According to a real senior market analyst, however, that’s almost certainly what happened — and what will continue to happen.
Mati Greenspan, senior market analyst at eToro, told Bloomberg yesterday that institutional investors are definitely buying the very predictable dip:
The dip […] is actually nothing new for Bitcoin, as far as percentage terms go. If we look at it historically, we’ve seen these types of pullbacks before. And definitely Wall Street is getting involved and they’re building the bridges as we speak.
What are those percentages Greenspan references, you ask? Well, as noted by Twitter user @APompliano, Bitcoin has seen drops of 94 percent, 87 percent, and 83 percent in 2011, 2013, and 2014, respectively — all of which were worse than 2018.
Bitcoin historical crashes:
2011: Bitcoin fell 94%
2013: Bitcoin fell 87%
2014: Bitcoin fell 83%
2018: Bitcoin fell ~70%
It wasn't a bubble. It was normal volatility. Everyone breathe. You can't kill an idea.
— Pomp ? (@APompliano) April 12, 2018
At the time of this writing, Bitcoin is trading at $7700 — and it’s easy to get excited at the prospect breaking out of 2018’s bear market. However, just because Wall Street is getting involved doesn’t mean we can expect both Bitcoin to surge and altcoins to moon. Noted Greenspan:
Whether they’re going to go full-on bull or full-on bear we don’t know, but the important thing is that they’re ready to take on and ready to inject new liquidity into this market — which at least should even things out and stabilize the price.
Stabilization is key at this stage, as it is crucial that Bitcoin finds support above the $7500 range — which certainly isn’t outside the realm of possibility, given that Wall Street is likely keen on buying the dip after missing the boat in December. Greenspan explained:
So they were trying hard to catch that bull run, and it seems they did miss the party. November was a very interesting time […] I imagine that the clients in the Wall Street banks also wanted to get in on that party. But […] the CBOE and CME came in late December, right at the peak.
Even if Bitcoin takes another plunge, it’s fairly easy to assume that the worst is over. With that being the case, expect some more surges as Wall Street and institutions show up to the party fashionably late.
What do you think of Bitcoin’s price action today? Do you think Bitcoin has already hit its yearly low? Let us know in the comments below!
Images courtesy of DepositPhotos, PxHere