coindesk.com
“Our desk has been a net purchaser over the past 24-48 hours,” Greg Cipolaro, global head of research at NYDIG, a bitcoin-focused investment manager, wrote Monday in an email to subscribers.
Cipolaro published the comments after bitcoin (BTC) tumbled from a record high above $64,000 last week to as low as $51,541 early Sunday. The largest cryptocurrency was changing hands around $55,400 as of 4:37 coordinated universal time (12:37 p.m. ET).
Bitcoin prices are still up 89% this year amid speculation that big investors are using the largest cryptocurrency as a hedge against inflation, in the wake of trillions of dollars of coronavirus-related economic stimulus over the past year by governments and central banks around the world.
“Institutional investors have had a buy-the-dip mentality during these risk-off events, suggesting increasing ease with handling bitcoin’s volatility,” wrote Cipolaro.
- “We believe the root cause of the sell-off had to do with investor positioning rather than fundamental news. Simply put, traders were overleveraged and positioned long, resulting in forced liquidations."
- Cipolaro also noted significant BTC spot price discounts on Binance compared to Coinbase. “The difference in spot, which is usually very tight, reached nearly 3% at one point. To us, these data points are indicative of selling pressure in Asia rather than North America.”
