$100 billion wiped in crypto market amid profit taking
The price of bitcoin and saw strong gains amid high buying pressures particularly from wealthy investors, as the entire market capitalization surged by 5.62% at the time this report was written.
Bitcoin traded at $48,715.70 with a daily trading volume of $54.8 billion. Bitcoin is up 6.05% for the day.
This is coming on macros suggesting the daily Bitcoin Spent Output Profit Ratio has seen a full reset and turned negative for the first time in five months – investors were on average moving BTC at a slight loss, indicating profit-taking has abated.
In an exclusive interview with Nairametrics, Louis Schoeman, a Snr. Forex analyst at Forexsuggest, a Luxembourg-based currency analytic firm explained the rationality behind Bitcoin’s recent surge.
“A bitcoin market correction has definitely been made in the last 7 days. According to our analysis, the reason for the price rise again is that hedge funds are starting to invest more aggressively in bitcoin,” Schoeman said.
In addition a leading global bank, Citi had recently suggested the flagship crypto-asset could “become the currency of choice for international trade,” thanks to its “decentralized design, lack of foreign exchange exposure, fast (and potentially cheaper) money movements, secure payment channels, and traceability.”
Crypto experts also argue that such strong demand in the Bitcoin market is largely attributed to the fact institutions are coming.
The market liquidity is tightening at the flagship Crypto market, as there are less than 4 million BTCs in circulation available for upcoming investors including the likes of Grayscale, Paypal, Microstrategy, hedge funds, MicroStrategy Inc.’s Michael Saylor purchased more Bitcoin to raise the enterprise-software company’s holdings to more than $4 billion.
Recent reports reveal that MicroStrategy Inc. recently bought more Bitcoin to raise the enterprise-software firm’s holdings to more than $4.3 billion.
It’s critical to note that just 21 million Bitcoins are ever going to be produced in total, and presently, there is about 18.9 million Bitcoin in circulation.
This shows a differential of about 2.1 million Bitcoin that are left to be produced, not forgetting about 4.5 million Bitcoins that have already been lost forever.
This also means that liquidity is drying up, with a growing demand for Bitcoin increasing, the price would most likely stay north.