Bitcoin May Stay As It Is for a While
At the time of writing, the world’s number one digital currency by market cap has dropped to about $9,600, roughly $100 less than where it stood just 24 hours ago. The halving took place just under a month ago, and many saw the currency reaching new peaks a few weeks or even a few days after this was slated to occur.
Sadly, this isn’t quite the case. Bitcoin, in fact, has undergone something of a struggle since that day, rising to $10K not too long ago only to fall about $600 below that figure just a few hours later. It was a strange scenario that many in the industry are still talking about, and at press time, no reasons have been given for the sudden change in bitcoin’s demeanor.
Nicholas Pelecanos – head of trading at NEM Ventures – says that this was the result of a consistent fight between the bulls and the bears, which he says is likely to last for several more months before things really take off for the currency. He explained:
Bitcoin is on a seesaw between bulls and bears. On one end, we have network data and technical charts. The other, strong fundamentals and a correlation to U.S. stock indices.
In the long run, however, he believes short-term selling will likely plague bitcoin for some time and that the fight between the two sides could prevent BTC from experiencing any serious hikes before the year is out.
Other analysts are offering similar sentiment, though this is because they believe that halving results are consistently delayed. Lennard Neo – head of research at Stack Funds – commented that halving events never boast quick results. Rather, bitcoin and other forms of crypto often incur heavy spikes about six months to a year after a halving occurs, and he believes this scenario will be no different. He stated:
It may take six to 12 months for investors to reap the rewards of post-halving price movements. There is a significant time lag between the halving event and the establishment of renewed market equilibrium based on general supply and demand.
Institutional Investors Will Boast Major Influence
Other investors are counting on a growing institutional presence to potentially boost bitcoin’s price. Danny Masters – chairman of Coin Shares – comments:
When we look at institutional inflows for our products and that of another asset manager, what you’re seeing are purchases that have now outstripped, for the first time, new bitcoins being created by 150 percent.
Michael Sonnenshein – the managing director at Grayscale – has said that the amount of bitcoin being traded by the firm’s institutional customers has exploded, growing from around $2 billion at the end of the first quarter of this year to about $3.5 billion at press time.