What would be the Bitcoin price recovery catalysts? The unexpected selloff in cryptocurrency markets surprised many traders and analysts. They are now looking at factors that could help crypto coins bounce back in both the short and long term.

Bitcoin’s price and the rest of the cryptocurrency market plunged sharply last week. This came after a period of stability during the previous two months. The total market capitalization dropped to $150 billion for the first time this year. Most coins have lost all the gains made during last year’s bull run.

Bakkt and Fidelity Could Improve Volumes and Cash Inflow

Susquehanna Analyst, Bart Smith, says the huge drop in the Bitcoin price was the results of low liquidity and sluggish volumes. He blames crypto exchanges for lower volumes; the analyst said it is quite hard for an ordinary trader to take part in crypto markets through platforms like Bitstamp and Coinbase – these platforms require traders to provide a lot of documents and government certificates before investing in crypto coins.

Bart Smith has strongly criticized governments and crypto platforms for setting hard rules. He says strict rules have limited the crypto markets to a small group of investors.

Explaining the argument, he said, “Number one, the on-ramps for new capital is very difficult. If you’re a global institution, it is still very difficult to buy Bitcoin in a way you might want to. A wealthy individual from the G.I. Generation is not going to take a high-resolution picture of their driver’s license and send it to a website and send money there. They want to invest with Fidelity. They want to invest with Bank of America.”

The expert, however, is optimistic that the involvement of Fidelity, Goldman Sachs, and Bakkt would not only improve institutional investors but that these platforms would also promote investments from retail investors.

“Hopefully, with Bakkt, Fidelity, and further regulations, there are going to be enough capital to soak it up,” he added.

Conclusion

The cryptocurrency markets are waiting for hints of new investments to recover the trading volume and price that they had lost throughout this year. Bitcoin price recovery catalysts like trading and custodial services from prominent institutions such as Bakkt and Fidelity would gradually improve trader’s sentiments, as Susquehanna analyst, Brat Smith, has pointed out.

Do you agree with Brat Smith? Share your thoughts with us in the comment section below.