Fund Manager Bullish on Crypto Despite Bitcoin’s 10% Crash
Bitcoin hasn’t done too well over the past few days.
After failing to crack the key $10,300 resistance, the leading cryptocurrency, as detailed in a previous Blockonomi market update, plunged 10% in minutes from $10,300 to as low as $9,250 on some exchanges. This move liquidated over $120 million worth of long positions on BitMEX, forcing many traders to the sidelines as volatility took over the market.
While returning to $9,500 to establish some semblance of support, Bitcoin is far from having recovered the entire drop, still trading 8% below this week’s high.
Still, some preeminent investors and analysts have written off this short-term volatility as pure noise, remarking that Bitcoin remains on a near-unstoppable trend higher due to a confluence of fundamental factors; indeed, year to date, BTC is trading up 40%.
Bitcoin’s Rally Is Just Starting, Proclaims Morgan Creek’s Mark Yusko
Speaking with CNBC in an interview Wednesday, Mark Yusko — chief of Morgan Creek Capital, an investment management firm that has its own cryptocurrency- and blockchain-centric funds — shrugged off the drop sustained by Bitcoin. In fact, he took a line from those shilling cryptocurrencies on Twitter, advising viewers to continue to stack satoshis (small portions of BTC):
“You should buy it, buy it now, tomorrow. Stack your sats. Build that portfolio.”
Like the host of the show, Yusko agreed Bitcoin remains “red-hot,” citing the existence of a number of likely growth drivers for the cryptocurrency heading into the future. The drivers the hedge fund manager cited are as follows:
- The 2020 block reward halving: Around early-May, the amount of Bitcoin issued per each block will get cut in half from 12.5 to 6.25, meaning that the asset’s inflation rate will be decreased by 50%. Analysts say that this shift to the supply-demand dynamic of the cryptocurrency market will drive prices higher:
- Growing levels of Bitcoin adoption: With the recent rally, the number of Bitcoin transactions and the number of active wallets have begun to surge. Like Yusko, a top Bloomberg analyst identified this trend as a sign of a returning bull market earlier this year.
- Favorable macroeconomic trends: Lastly, the favorable macroeconomic trends in the rapid lowering of interest rates and the printing of money to sustain markets are likely to favor Bitcoin’s growth, Yusko suggested.
Far From the Only Bull
Yusko is far from the only crypto evangelist to have recently graced a mainstream media with analysis boosting Bitcoin.
Per previous reports from Blockonomi, Fundstrat Global Advisors’ Tom Lee sat down with CNBC last week to share his thoughts on developments in the cryptocurrency market. Much like his peer over at Morgan Creek, Lee cited the halving and macroeconomic trends, but also added other catalysts that are likely to drive BTC growth.
One he mentioned was Bitcoin’s recent passing of its 200-day moving average. While this is bullish in and of itself — this specific moving average is seen as an indicator of an asset’s long-term directionality — the Fundstrat co-founder noted that the cryptocurrency has an average performance of 197% in the six months after a passing and holding above this moving average.
Another he touched on was that with the impending U.S. presidential election, crypto won’t be under as much scrutiny by the American government as it was in 2019, which was when President Trump and other key officials came out to denounce cryptocurrencies.
The convergence of these trends, Lee concluded, is likely to push Bitcoin above $40,000 in the future. He didn’t give a date for this forecast, though he previously said that BTC is likely to gain 100% in 2020, implying a year-end price of over $15,000.
The post Fund Manager Bullish on Crypto Despite Bitcoin’s 10% Crash appeared first on Blockonomi.
OhNoCryptocurrency via https://www.ohnocrypto.com/ @Nick Chong, @Khareem Sudlow
