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Crypto bull Meltem Demirors said Wednesday that she believes the recent turbulence in bitcoin and ether to be positive long-term developments, saying the bullish story around digital assets remains intact.
“It was really sparkling. There was a lot of influence in the markets. Some of that was taken out in April,” CoinShares’ strategy director said on CNBC’s “Fast Money”. However, she added, “there was still a lot of leverage so this correction that we saw is healthy. A pullback is normal in crypto.”
Demirors’ remarks follow a particularly volatile trading period for bitcoin, which is the world’s largest cryptocurrency in terms of market value.
At its daily low, bitcoin was down more than 30% on the session to $ 30,001.51, according to Coin Metrics. This represents its lowest level since the end of January and has caused bitcoin to drop more than 50% from its all-time high above $ 64,000 in mid-April.
Bitcoin recovered some of those losses on Wednesday, trading above $ 39,500 at 6:15 p.m. New York. It has nevertheless remained down more than 8% over the last 24 hours.
Ether, the second largest cryptocurrency in terms of market value, has also fallen sharply in recent days after hitting an all-time high above $ 4,300 last week. It fell about 22% in the past day to trade around $ 2,600 per token on Wednesday. Ether, which runs on the Ethereum blockchain, started the year at a price of less than $ 800 apiece.
Demirors said she believes investors across all asset classes are broadly trying to reduce risk, which is playing a leading role in the crypto plunge. She said her company, which manages around $ 5 billion in assets under management, has seen a downtrend in options activity over the past two weeks.
“I think right now we’re seeing a bit of a reluctance around risk in general, so the distributors are pulling back. We saw that reflected in the flow of funds last week,” added Demirors, who previously told CNBC that she got into bitcoin at around $ 150 a coin.
“We saw $ 50 million in net outflows of bitcoin fund products last week. So I think it’s reluctance. It’s macro related. It’s related to global markets, to global markets, to global markets. tax day sale. People get anxious and that’s what we have here, “she argued.
Another factor that appeared to influence the crypto markets recently is comments from Tesla CEO Elon Musk, whose electric vehicle maker owns bitcoin. However, after its announcement last week that Tesla would stop accepting bitcoin as a payment method, hundreds of billions of dollars were taken from the crypto market.
Musk sent a tweet on Wednesday implying that Tesla would not sell his bitcoin holdings.
Institutional investors have recently switched from bitcoin to gold, according to a new note from JPMorgan. The company’s research is notable as the adoption of bitcoin by institutional investors was cited as one of the reasons for the rally that began last year.
Demirors isn’t the only longtime bitcoin believer who remains confident in the face of recent sales. Bill Miller, the notorious value investor and bitcoin bull, told CNBC on Wednesday that the recent decline in bitcoin was “pretty routine.”
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