The Crypto Drop: Two Opposing Perspectives — Hoxton Capital Management
The Crypto Drop: Two Opposing Perspectives
Last week crypto saw a large sell off triggered by the news that Tesla would stop accepting Bitcoin as a payment method due to its negative impact on the environment, and China discussing stricter measures against crypto currencies. Some cryptos dropped in value by almost 80%.
The Enthusiast’s Perspective — Paul
‘Bitcoin has been on a wild ride recently with the added media hype that surrounds times when people lose or make a lot of money. The difficulty with bitcoin is that there is not a fully diversified ownership holding within the asset class. This causes a problem when there are large holdings held by a few investors. In the bitcoin universe these individuals are called whales. Typically, when these whales are active in the market, they have the ability to move the market in large quantities and in particular when they make a market move during weekends when trading volumes are thin this is exacerbated.
Originally published at https://hoxtoncapital.com on May 25, 2021.