Experts share their insights on the current movement in BTC and the crypto markets. The world’s largest cryptocurrency zoomed past $12,000 yesterday to notch its highest level since July 2019. Bitcoin is one of the best-performing assets this year, up about 70%.
Q2 2020 hedge fund letters, conferences and more
Carlson Capital's Double Black Diamond Fund posted a return of 3.3% net of fees in August, according to a copy of the fund's letter, which ValueWalk has been able to review. Q3 2021 hedge fund letters, conferences and more Following this performance, for the year to the end of August, the fund has produced a Read More
The below commentary explores the macro trends influencing the current upward movement in the BTC market, as well as speculating on where this current run will lead.
The Cause Of The Upswing In The Crypto Markets
John Wu, President at AVA Labs:
“The latest sustained upswing in the crypto markets can be attributed to a number of conditions.
The boom of decentralized finance is making a tangible impact on the demand and use of crypto assets. As returns from traditional investment vehicles reach record lows, crypto-savvy investors are finding yield in DeFi protocols and willing to trade-off the systemic risks they see in traditional finance for the product risks of this maturing ecosystem.
At the same time, the blockchain industry has continued to mature and earn confidence from new participants. Widespread adoption by incumbent institutions, as well as the success of business strategies embracing these assets--Bitcoin recently created the biggest earnings surprise of the week for a major traditional payments firm--are beginning to establish crypto as an integral asset class in the traditional capital markets.
It's also apparent that there is overwhelming demand for hard assets. Gold has topped record highs, and the digital gold narrative around Bitcoin appears to be growing outside the world of crypto as investors weigh historic fiscal policy actions from monetary authorities.
With the backdrop of prolonged economic uncertainty wrought by COVID-19, many investors are taking the initiative to seek out alternative assets that are less correlated to the traditional markets, including the crypto markets.”
Despite The Movement, BTC Returns Have Never Disappointed
Luciano Nonnis, CEO of DXone:
“Bitcoin is the mothership of all cryptocurrencies and an irreplaceable investment alternative for people looking for stable deflationary assets.
To this day, Bitcoin has never disappointed in terms of performance and represents the general ideology of the digital, incorruptible currency or store of value. We should expect a growing interest in Bitcoin due to the "failure" of the traditional monetary system, but we could definitely be more positive if people would not choose Bitcoin as a sanctuary, but as what it really represents.
People keep waking up and thinking about why a printed dollar, which can be printed endlessly, can still be worth something. The important thing is to understand that there is a difference between money and currency: currencies are inflationary, money should not be. The ever-decreasing interest in fiat currencies in general, as well as the anxiety regarding our financial system and rising inflation are increasing buyer interest in markets that offer stable commodities, including Bitcoin.
There are a number of other obvious signs of confidence in the crypto-markets. Trading volumes are steadily increasing, important resistances have been broken (USD 10.3K), as well as USD 12K--the all time high since March 2018. News of mass adoption such as Bitcoin’s integration into Paypal and Mastercard services, indicates an interesting future and a huge possibility for a bullrun with new all time highs.”
The Growing Confidence In The Digital Asset Economy
Konstantin Richter, CEO and Founder of Blockdaemon:
“The current upswing in the crypto markets is a signal of the growing confidence in the digital asset economy. A number of significant developments are likely to have triggered this bullish run in the market.
On a broad level macroeconomic conditions are clearly fuelling demand for assets which are unaffected by inflationary concerns. Currency debasement in the US Dollar influenced by intensive government policies of quantitative easing are triggering rallies in gold and other safe haven assets which Bitcoin and cryptocurrencies have also been placed in the bracket of.
The growing rise in institutional adoption of cryptocurrencies and blockchain technology is also driving confidence in the market. The decision by the Office of the Comptroller of the Currency (OCC) to grant national banks in the US permission to operate crypto custody services will finally allow financial institutions to custody digital assets. Adoption of Bitcoin trading services by incumbent payments institutions such as PayPal are also significantly increasing levels of adoption by bringing crypto to a wider demographic of users. Additionally, projects this year have been accelerated by having strong infrastructure providers supporting their advancements, as well as network scalability and stability.
Other cycles within the crypto industry are also helping to drive price, it’s likely that the rally in DeFi tokens we saw in early July is now influencing Bitcoin price, as investors pour their profits into Bitcoin.”