Big Investors are Buying Bitcoin on the Dip; Here’s Why
Bitcoin’s price (BTC) has lost almost 80% of value in the past 11 months, dragged down by investors declining confidence in crypto markets. The selloff has intensified this month. The largest coin has lost almost 40% of the price in November compared to the past month.
The selling pressure from retail investors has triggered the latest crash; retail investors fear that the market could crash to zero as Bitcoin and the rest of the crypto market fail to work as a reliable medium of exchange.
But, institutional investors, who were reluctant in investing in crypto markets over the past couple of years, started buying Bitcoin and the rest of digital currencies following the big drop in prices.
Why are Big Investors Buying Bitcoin?
The market has been witnessing investments from institutional investors and billionaires after a Bitcoin price drop of 80% from its all-time high.
Tim Draper, renowned venture capital investor, is buying Bitcoin and the other crypto coins on the selloff. He said, “I tend to move my dollars into bitcoin, because I think, well, why would I want this currency that’s tied to some political force when I have a currency that is going to be frictionless and global? I would much rather have global currencies than one that is sort of tied to a political force.”
Echoing Draper’s comments, Peter Brandt, who is a prominent trader and technical analyst, believes that small investors are leaving the crypto markets while big and savvy investors are using the drop as a buying opportunity.
Brandt says, “Bitcoin is entering the stage of its life cycle when stale and weak money capitulates and strong hands accumulate strategically.”
Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim, tweeted that institutional investors are enjoying the bearish trend in crypto markets.
Institutional investors, however, invest in Bitcoin and other speculative assets through the over-the-counter (OTC) market. Therefore, it is quite difficult to observe the inflow of money from institutional investors.
Buying on the dip and selling on high has always been the best investment strategy. The interest of institutional investors in Bitcoin indicates strong future fundamentals for crypto markets. This would also enhance the retail investor’s confidence.
What’s your opinion about institutional investment in crypto markets? Express your thoughts in the comments section below.