Analysts are hopeful that Bitcoin’s and the overall cryptocurrency market fundamentals are more powerful than ever before. The latest market correction provides fresh opportunities for investors to take long-term positions.
Before the latest market correction, Bitcoin‘s sudden surge close to its all-time high has captivated retail investors and institutions alike. One of the major driving forces behind BTC’s rapid price surge has been massive institutional money inflow. In fact, in the month of November, there’s been massive institutional accumulation for Bitcoin. However, it’s worth mentioning that the altcoin season has all chances to come quite soon too.
The Grayscale Bitcoin Trust (GBTC), a Bitcoin investment vehicle from digital asset manager Grayscale, hit major milestones in the last few weeks. The Grayscale Bitcoin Trust holds more than half-a-million BTC as of date, with total valuations over $10.1 billion. Nick Cote of gamified trading platform Hxro Labs told Cointelegraph:
“The primary reason for the steady grind up in Bitcon has been the increased interest and aggressive buying activity from institutions. A lot of investors are going through Grayscale.”
Cote also points at some of the top public-listed financial giants like MicroStrategy and Square who have millions-of-dollars in BTC. These companies have entered BTC as a potential inflation hedge against poor monetary policies by the central banks. Cote called this behavior the “positive feedback loop” for the crypto markets. He added:
“There will be pullbacks of course, but as long as institutions believe in the narrative of Bitcoin being used as a store of value or hedge against inflation, it becomes a positive feedback loop.”
Altcoin Season Coming Soon
NEM head of trading Nicholas Pelecanos said that Bitcoin’s fundamentals have turned stronger than ever before. He cites different reasons like public listed companies moving extra cash to BTC. Besides, some of the fundamental factors are also post-halving supply dynamics. Pelecanos next big bet is the altcoins market. He stated:
“BTC is back at its all-time high levels, but what is worth noting is the valuation of the altcoins which are on average still 50% below their all-time highs”.
However, he asks to be selective while picking altcoins. He notes that several altcoins have failed in attracting adoption. “Some altcoins represent projects that are no longer functioning, yet other projects have seen tremendous development on both adoption and tech,” explained the expert.
Well, Wednesday’s crypto market correction has wiped out over $50 billion from the overall cryptocurrency market cap. The marketwide correction provides new opportunities to make a fresh entry.
On the other hand, crypto analyst Michaël van de Poppe asks investors to maintain caution. “At this point, don’t feel FOMO on things like ETH or XRP. There will definitely be more bullish momentum in the coming months, but be protective of capital,” he added.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.