Since its peak in early May, the global crypto market capitalization has dropped from $1 trillion to $1.360 trillion, according to Stakers.io. Bitcoin accounts for 47 percent of the market and ether for 17 percent.
“Death to the rat”
81% of managers believe bitcoin is a bubble according to the latest Bank of America-Merrill Lynch monthly survey. 224 managers ($667 billion in assets) had been surveyed in early June.
10% of the investment firms surveyed by JP Morgan have started investing in cryptos. But 40% of investors have done so on their own. One in three investment firms agrees with Warren Buffett when he calls bitcoin poison and “rat poison.” 42% don’t see cryptos going away and for 9% they are an asset class in their own right. A large majority anticipates a tightening of regulation due to recurring fraud.
Tuesday’s hectic session saw 260,000 traders whose accounts were closed due to their excessive losses. They lost big on bitcoin, then ether, dogecoin, and ripple. By the end of February, the Chinese New Year correction had taken 500,000 speculators.
60% of bitcoins sold in May and June resulted in a loss for sellers because these bitcoins had acquired at a high price in March and April, according to calculations by PlanBTC. com. Nearly 5.3 million bitcoins were purchased at a price higher than the current level. Long-term investors with a cost of less than $20,000 per bitcoin are showing comfortable profits and are able to accumulate more bitcoins.
Since bitcoin’s high above $64,000, long-term investors have continued to buy bitcoins. These purchases have helped stem the decline and limit the extent of the price drop, according to Glassnode. However, 30% of the bitcoins they have bought since mid-April are in the red (losses).
Mike Novogratz of the hedge fund Galaxy digital, remains confident about what will happen next. Bitcoin can fall towards $25,000 without questioning its medium-term upward trajectory. “I was recently in discussions with large U.S. pension funds close to investing in bitcoin. I’m not really nervous,” he told CNBC.
Hedge funds: an interest in cryptos
Hedge funds are showing interest in cryptos from a medium-term perspective. These include small funds (assets under $100 million) that operate in emerging markets or commodities. This is the conclusion of a survey of 100 hedge funds conducted in April by Intertrust group. In 5 years, they estimate that they will have invested an average of 7.2% of their assets in cryptos. American funds are the most enthusiastic. They want to invest 10% of their capital on cryptos and bitcoin in the medium term. Alongside these smaller funds, some large global macro or quantitative hedge funds have already entered this market. In particular, they deal in bitcoin futures and options. This is also the case for most high-frequency trading (HFT) firms.