Research from Coinbase bring out key points that surely is something positive you would want to hear as cryptocurrency fan.
Coinbase happens to be one of the largest cryptocurrency exchanges in the world in terms of market capitalization. The cryptocurrency exchange went on to conduct research about the world’s most capitalized cryptocurrency Bitcoin and found out some interesting facts that’s surely going to make you believe that the situation the market is not as bad as it appears to be.
According to the research carried out by Coinbase, it comes to notice that long term bitcoin investors have actually not sold their holdings even in the current market crisis. It comes to light that; the small investors and speculators are the ones who have been aggressively selling their holdings as they are getting perturbed by the market crisis.
The research also made it clear that the market is in a credit related risk by showcasing the current situations of the cryptocurrency exchanges and crypto miners. It also denied the opinion that the market was in crypto specific crisis.
Long term believers still believe in Bitcoin!
We all know that bitcoin hit its bottom from the past two years in June when its value plummeted to under $20,000. Even when the value of the cryptocurrency was down by 70%, it is observed that around 77% of long-term investors did not sell their holdings. The time period of the holdings has been calculated to be either equal to or more than six months.
The research also indicates that the cryptocurrency has a strong hold in the minds of the investors. According to the paper, this tendency is a sign that true believers are less inclined to intensify the selling pressure during tumultuous times.
Current market situation is actually a reaction of FED’s actions.
According to the reports, it is noted that, the current market avalanche is caused by FED and its alarmingly high rates. The overleveraged cryptocurrency companies, as well as miners who were compelled to sell their holdings when their collateral that had lost value was in danger of being liquidated.
Writer’s Analysis:
According to me, I feel that the belief of long-term holders in Bitcoin is good to witness, especially when the value of the cryptocurrency has hit its lowest point for two years. Though, I can’t help but think, that these investors are holding the holdings to forgo the huge amount of losses that they could incur by selling the cryptocurrency at a low rate. In this scenario, I hope that I am proved wrong and that the bitcoin investors really have assessed the volatility of the currency and are in it for good.
