Crypto big shots and a national leader buy the dip amid $200 billion revaluation
Another day, another fascinating glut of volatility.
As the day began across Europe, some of the most popular cryptocurrencies experienced a $200 billion combined downturn in value.
Although nowhere near as dramatic as the $700 billion wiped off the value of 5 major cryptocurrencies in May this year as a result of Elon Musk’s notorious tweet, market analysts are referring to this morning’s drop as a ‘flash crash’.
In this morning’s volatile movement, over 8% dropped from the value of Bitcoin, which is now languishing at just below $44,000 in value, whereas Ethereum fell by more than 10%, while Cardano, Solana and Dogecoin all fell by more than 13%.
Once again, however, the volatility is being welcomed and viewed very positively, just as it was during the Elon Musk-fueled market crash in May.
People of high standing, and fiscally knowledgeable people are once again getting involved in cryptocurrency investment, and buying the dip.
One such figure is the President of El Salvador Nayib Bukele, who presides over the first country in the world to list Bitcoin as its official national currency. If that isn’t confidence, what is?!
Many market experts remain convinced that any short term volatility will ultimately be forgotten as Bitcoin rises to new all-time highs in 2021.
Let’s recall that Bloomberg just a few weeks ago had Senior Commodity Strategist Mike McGlone on TV, who said in a television interview “Guess what? If it just follows Ethereum, it goes to $100,000″ making a reference to the possibility of Bitcoin making similar gains in percentage terms to Ethereum.
On Al-Jazeera, Fundstrat Global Advisors’ Tom Lee at the same time said that he can envisage Bitcoin reaching $100,000, which he thinks will happen by the end of 2021. The firm’s co-founder and head of research recommends investors follow a simple rule: If Bitcoin crosses above its average price over the last 200 days — a long-term momentum measure — then it’s time to buy.
This was after the famous Elon Musk tweet, and well before the US government began publicly speaking about potential tax treatment for cryptocurrencies and looking at regulation, two areas which stood cryptocurrency in very good stead in the eyes of its proponents, as regulation paves the way ahead for a sustainable cryptocurrency infrastructure within which blockchain projects and crypto assets can grow and develop even further, exponentially.
Given that sentiment from some very highly respected institutions that are known for their quality research, it is now an interesting era in that new enthusiasts as well as seasoned investors appear to taking these opportunities to get into crypto investments whilst the market displays these very sharp drops.
Within the crypto fraternity, buying at the moment is also very much on the mind of institutional investors.
According to reports this afternoon, research has shown that despite the volatility and dramatic falls in value this year, each low has still been way above any previous high seen in 2020 or earlier.
One reason for the lows being not as low as those in the past is that bitcoin is now bolstered by massive institutional investment. New research from Fidelity Digital Assets has found that 52 per cent of institutional investors now hold bitcoin or other cryptocurrencies.
That is a perfect scenario for those wanting to get involved in a rapidly developing decentralized finance ecosystem which is giving rise to all manner of new blockchain related products and services whilst at the same time participating in a volatile market which is constantly on the up when looked at on an overall, long term basis, whilst traditional asset classes remain totally stagnant to the extent that many established banks and brokers could not even handle a bit of price movement around the meme stock craze in January this year.
Stagnancy does not fuel the interest of those wanting to make their own market and participate in the development of the decentralized financial services world that is beginning to overshadow the traditional assets.