The cryptocurrency market has been struggling since 2018 entered. And the reason is quite clear. There are many investors that are not confident enough to HODL especially when regulators can easily ban cryptocurrencies at any given time. With lacking regulatory clarity, Bitcoin has lost half of its price when 2018 entered. In fact, it even had a time when it almost reached $20,000. And in the past few days, Bitcoin has suffered from a bearish trend trading just under $7,000.
The good news is that Bitcoin rebounded from $6,300 to $6,729.74 at present. It has been descending since May 3 when Bitcoin had a good April and achieved $10,000. However, it is too early to celebrate. There is a likelihood that Bitcoin can still slide even below the $6,000 mark .
Is It Going to Be Bullish?
Though this is good news to investors, it can’t be concluded at this point that BTC is already looking bullish. It is important to take a closer look at the volume in the next days to come whether or not Bitcoin could go towards $6,800 or even move towards $7,000.
And what made the $12 billion fluctuation in the crypto market in just 24 hours? This week, Coinbase mentioned that it is preparing to bring third-party institutional custody into play. According to Kyle Samani, who is a managing partner at Multicoin that has partnered with the company, “There are a lot of investors where custodianship was the final barrier. Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital”.
You also have Square given by New York’s Department of Financial Services a virtual currency license. What it means is that users are now allowed to trade using Bitcoin.
There are also other prominent investors and even hedge fund managers that have this opinion. Ari Paul who works for Blocktower has the same opinion. He believes that it is the lack of custodian solution that forced institutional investors to just wait it out.
There are no institutional investors currently in the crypto market. However, it is also true that there are regulators that are working towards making the market more institutional investor-friendly. Japan has been collaborating with G20 countries, for instance, in order to come up with rules that could potentially be applied to the largest markets of cryptocurrencies including the US and Japan.
Critics of Cryptos
Bank for International Settlements, which is described as the bank for central banks, mentioned recently in its research paper that cryptocurrency can’t be used as an alternative to fiat currencies. It discussed that “cryptocurrency can simply stop functioning, resulting in a complete loss of value”.
Whether or not cryptos are headed up is still left to be seen in the next few days. Bitcoin may not also be able to experience a bull-run similar from last year considering the possibility that it can precipitate to other altcoins instead. With improved features in speed as well as scalability, Bitcoin expects tough competition on the part of Bitcoin.