Bitcoin’s weekend tumble hints at Wall Street traders’ growing sway


Bitcoin’s rocky weekend was one of the first to create a big wave of cryptocurrencies in a traditional financial asset storm, emphasizing that large investors are playing an increasingly important role in the digital asset market. doing.

The largest cryptocurrency price by market value fell $ 10,000 in just 60 minutes early Saturday morning in London, according to the FT Wilshire Mixed Bitcoin Price Index, which tracks transactions on major crypto exchanges. And reached $ 42,222.

The 20% sharp drop occurred just hours after the end of the volatile week on Wall Street. On Wall Street, stocks and bonds soared in response to potential changes in monetary policy and the proliferation of new coronavirus stocks.

Crypto’s weekend shocks suggest that this normally somewhat separate market is more closely tied to these traditional assets, especially now that larger institutional investors are more involved.

“This started as a risk-off move in the traditional macro world. [which] Investors selling stocks, unlike other markets, rushed to trade Bitcoin over the weekend, said David Fortier, a portfolio manager at Nickel Digital, a digital asset specialist.

Joshua Lim, Head of Derivatives Trading at Genesis Trading, said bets of more than $ 2.5 billion have been sour “at the first major clearing event since September.” As a binance.

On crypto futures exchanges, traders who use borrowing to expand their bets are usually cleared when the price of the digital token reaches a certain threshold. Clearing price..

Lim also said that in the traditional futures market, where investors can bet on cryptocurrency prices, a sharp fall has washed away more than $ 5 billion in positions, reducing the number of open bets to nearly a quarter. He added that it has decreased.

Bitcoin prices have skyrocketed by more than 500% over the last two years, and some investors (mainly amateur individual investors as well as some professionals) have uncorrelated returns with other assets. I was drawn into the theory that there is a possibility. However, as more hedge funds and other large investors are involved, the connection with other markets becomes closer.

Many professional investors were also keen to crystallize paper profits into real returns by the end of this year, which contributed to the sold-out, said Jan Stromme, founder of crypto trading company Alphaplate. Told.

“Risk sentiment in traditional markets [digital ones]”Fauchier added.

Comments from Federal Reserve Chairman Jay Powell, suggesting a resurgence of the coronavirus, weak employment data, and faster-than-expected rises in interest rates, rethinking bets on investors and when global growth is strong. Encouraged to switch from prosperous assets.

“”[Bitcoin’s sell-off gathered pace] As the general market jitter escalate, “Lim said. This reminds us that while Bitcoin is considered one of the more secure cryptocurrencies compared to more volatile bets such as Dogecoin, it is still vulnerable at the nerve moments of the market.

By Tuesday, prices had not fully recovered and Bitcoin was trading at $ 51,265.

Professional investors who set foot on cryptocurrencies generally lack most religious beliefs about digital assets common to the hardcore fan base of individual investors who insist on holding digital coins.

Beat Nusbaumer, Swiss currency trader and portfolio manager, said: Early retail buyers of cryptocurrencies welcomed institutional investors to the market in hopes of raising prices, but weekend sellouts suggested that it also introduced new vulnerabilities. He said.

Video: Cryptocurrency: How Regulators Lost Control

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The post Bitcoin’s weekend tumble hints at Wall Street traders’ growing sway appeared first on California News Times.

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