Avi Salzman, a senior editor for Barron’s magazine, released a report this week featuring big money investors and executives from the rapidly growing cryptocurrency sector who generally believe, despite the recent bitcoin price drop, cryptocurrency will inevitably replace fiat.
Over the past five months, the valuation of the cryptocurrency market has dropped by more than 55 percent, from $829 billion to $372 billion. In January, at its peak, the valuation of the cryptocurrency market nearly reached a trillion dollars as blockchain projects still in their infancy and testnets such as Tron and EOS surpassed $17 billion.
Since then, the price of most cryptocurrencies like bitcoin, Ethereum, Bitcoin Cash, EOS, and Ripple have more than halved. Naturally, as the valuation of the cryptocurrency market fell by large margins, an increasing number of investors have started to lose interest in the market and confidence in the short-term rally of both major and emerging cryptocurrencies. But, regardless of the massive correction, big investors are still extremely optimistic and bullish.
Earlier this month, CNBC Fast Money contributor and BKCM founder Brian Kelly emphasized that he was shocked the market did not react to the entrance of the New York Stock Exchange (NYSE) and JPMorgan into the cryptocurrency market. If the two major institutions had entered the market in January, when the cryptocurrency market was at an all-time high, it likely would have pushed the cryptocurrency market beyond the $1 trillion mark.
More institutional investors, retail traders, financial institutions, banks, stock markets, and governments are involved in the cryptocurrency sector than ever and the market is nearly at a yearly low. While most individual investors and newcomers see a sell-off period in a highly volatile time frame like this, large-scale investors see an accumulation period and an opportunity.
Erik Voorhees, the CEO at ShapeShift, stated:
“I’m all for financial companies getting involved in crypto. Crypto as a monetary unit is transparent and legitimate because it’s market-based, as opposed to what they do now, which is handling fiat, which is not transparent and not market-based.”
According to Salzman, Voorhees emphasized that it is inevitable cryptocurrencies like bitcoin and ether will replace fiat currencies like the US dollar in the future. Voorhees also noted that he does not believe financial companies will attempt to sidetrack the effort as ultimately, businesses chase money. “That’s the point. t’s pulling them in,” Voorhees added.
In the short-term, the bitcoin price could dip below the $8,000 mark, potentially into the lower end of $7,000. It also could demonstrate a sudden increase in momentum and bounce back to the $9,000 region and eventually to $10,000.
No investor or analyst could predict where the price of bitcoin goes in the short-term with absolute certainty. But, big investors are convinced cryptocurrencies are here to stay and will compete with traditional currencies and assets such as the US dollar and gold, and that is what really matters.
Read more at: CCN