In November, the crypto market underwent the largest sales in 2018. Bitcoin fell 35 percent. Attorney Jake Chervinsky of the American law firm Kobre & Kim assumes that institutional investors are currently quietly buying Bitcoin while retail investors are repelling.
“[your] investors, now that Bitcoin is under $ 4,000: retail investors [in panic]:” Should I sell and then buy back cheaply if the price goes down? Should I open a short position? Should I just let it be completely? Is it zero? Was the whole crypto thing just a scam? “Institutional investors [laughing]:” Please continue to sell cheap Bitcoin. Thank you! »”
Chervinsky's opinion led to a series of controversies within the crypto community on Twitter. In most cases, skeptics spoke up and doubted the correctness because of the lack of momentum of the large cryptocurrencies. They argued that if institutional investors bought Bitcoin, Bitcoin's price would have to rise. In fact, he had dropped by 35 percent.
Chervinsky replied that institutional investors are being very cautious about buying new assets. They do this in a way that does not affect the market. So he wrote:
“The fact that institutional investors buy an asset does not mean that its price rises immediately. It may be that institutional investors buy Bitcoin (while hedging it adequately) and the price still falls. “
When some other Twitter users doubted that, Chervinsky added:
“None of the investors and traders I've worked with open a” naked “long position on speculative assets. When they buy spot, they limit the risk in other markets at the same time. “
It should also be remembered that institutional investors are generally more likely to buy speculative assets in over-the-counter trading. However, their traders do not need to share their trade data, so this data is rarely known. Therefore, it is difficult to substantiate the claim that institutional investors are buying Bitcoin on a large scale.
However, there are signs that Chervinsky's statement is true. For example, the crypto management company Grayscale Investment reported large inflows. University foundations, such as Yale University, are also opening positions, which could prove a growing demand for Bitcoin.
As a result, it remains unclear whether institutional investors are really buying Bitcoin as a long-term investment or are only generally interested.
One indication is currently only the demand for Coinbase Custody, Bakkt and Fidelity Digital Assets. Bakkt has recently communicated on medium that demand is growing rapidly.
Sources: Twitter, Yale Daily News, Medium, Pixabay
Author: Peter Joost – Source Post: https://www.kryptovergleich.org/buying-the-institutional-investor-bitcoin-on-the-mini-investor-in-panic-devices/
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