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According to the CEO of CryptoQuant, Ki Young Ju, Bitcoin (BTC/USD) will hold the narrative of being digital gold as long as large HODLers such as MicroStrategy do not sell. The actions of these major HODLers determine the returns generated by fundamental investors.
The CEO’s remarks come amidst growing tensions in the cryptocurrency market amid the global geopolitical crisis.
MicroStrategy plays a major role in BTC’s price action
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Ju said that Russia’s recent invasion of Ukraine did not cause “significant on-chain activities.” According to the executive, Bitcoin was only digital gold if large institutions that HODLed Bitcoin did not sell.
Institutions who bought $BTC via on-chain txns seem [to have] not sold their holdings yet,” he said. “Institutions running algorithmic trading bots think BTC is a tech stock.” As such, he alluded that Bitcoin was behaving similarly to the stocks of Microsoft and Facebook.
According to Ju, he preferred to remain exposed to Bitcoin until the CEO of MicroStrategy, Michael Saylor, decided to sell some of his holdings. MicroStrategy is one of the largest Bitcoin whales, with more than 125,000 coins in its wallet address. Saylor is an agile Bitcoin supporter, and he has previously said that he would never sell any of his holdings.
FTX CEO speaks on recent Bitcoin plunge
The CEO of FTX, Sam Bankman-Fried, tweeted about his opinion of the recent reaction of Bitcoin to the Russia-Ukraine crisis. The invasion of Ukraine by Russia caused Bitcoin’s prices to tumble to below $35K. However, the coin has since recovered and even touched $39K on Friday.
Bankman-Fried said that Bitcoin should not have reacted the way it did to the crisis. Usually, political crisis causes people to convert fiat into harder currencies. Bitcoin is considered a hard currency because of its capped supply of 21 million coins. This has earned it the term digital gold because of its mining difficulty and capped supply replicate gold’s features.
Bankman-Fried attributed the volatility on Thursday to “algorithm followers.” He said that the diverse price between these traders and “fundamental investors ” caused Bitcoin’s plunge to the June 2021 lows.