When you sell, they buy. An insight into crypto wars
Bitcoin and ethereum have become more than the currency most people perceive them to be. Bitcoin, for instance, has behaved like a commodity in the markets for the past couple of weeks. In fact, it has behaved more like an asset than a currency. Since its inception, bitcoin has grown to a market capitalization of over USD 690 million.
Because of the speculation in the market and volatility, bitcoin owners are changing tact. Recently, you see more owners holding onto their bitcoins as assets rather than use them in transactions. This is because the value of these crypto-assets rises so fast that if you bought an item for one bitcoin at USD 10000, that same bitcoin could be worth USD 20000 the next week. For example, the dollar value of 1 bitcoin early last year was USD 3900. If you compare that with the USD 60000 highs that seen a few months, that is a quantum leap!
The value has risen so immensely during this period. To quantify the percentage growth in value of one bitcoin downplays the magnitude of this innovation’s achievement. Big institutions or the sharks have taken notice and are buying these cryptocurrencies to hold rather than sell.
The recent bear run notwithstanding, many experts believe that bitcoin is on its way back up. Some experts have even expressed optimism of the price getting to USD 100,000 by the close of 2021.
It is no secret that bitcoin has had its ups and downs since it came online in January 2009. During these bear runs panic spreads among retails traders who begin dumping their bitcoin in a rush to salvage their investment. However, it has become clear that most big players and institutions that want to own bitcoin are buying during these periods.
Big money players like Goldman Sachs, are known to speak positively about the assets when they want the prices to rise and negatively when they want to buy. They would say how bitcoin is a great asset for the future one time and talk about how harmful bitcoin mining is to the environment on the other. Meanwhile, they are accumulating these assets en masse while doing this. Critics have come out to say that this some form of manipulation.
The retail market is filled with new traders who do not have experience in how markets behave. Essentially, these big players use their clout to create these environments that will cause panic among retail traders. as a result, they sell their bitcoin to these willing and well-funded buyers who want to hold cryptocurrencies as assets.
