Most cryptos have been bouncing up and down lately, with bitcoin falling below the psychologically significant $10,000 mark on Friday for the first time since late July before being pulled to safety by optimistic investors buying the dip.
Crypto traders were rattled by a sell-off in equity markets that saw the S&P 500 record its first weekly loss in six weeks while the Nasdaq posted its worst weekly performance since March.
This downturn has likely raised concerns among some crypto investors that the bears could be regaining control. However, some influential analysts are unfazed, seeing it as normal price action for the notoriously volatile market. This, they say, is an opportunity to accumulate at fire sale prices.
Prominent analyst Raoul Pal, founder and CEO of of Real Vision Group, said he was bullish on bitcoin and Ethereum. He tweeted, “These are times to add, when the short term guys with leverage have been washed out. Will it stabilize here? Who knows, but it feels like the add zone to stack some more.”
John Kramer, a trader at Hong Kong-based market maker GSR, concurred.
“A drop like this won’t deter the majority of investors, who have a longer-term investment thesis,” he told Forbes, adding that “many investors will see this as an opportunity to buy the dip.”
Kramer continued, “Nothing has changed about the fundamentals behind the bull case,” referring to central banks’ continued stimulus measures, including France’s $100 billion plan announced last week.
Simon Peters, crypto-asset analyst at multi-asset investment platform eToro, told Forbes, “If there is a silver lining, it is this – that a drop back down to $10,000 could very well tempt some bulls who have been sitting on the sidelines to at last invest in bitcoin.”
One bullish investor is the son of bitcoin-hating goldbug Peter Schiff. Spencer Schiff’s decision to increase his investment in what some analysts, including Bloomberg’s influential Mike McGlone, see as the digital version of gold, at least potentially, provoked a humorous reaction from his father on Twitter in the form of an investor survey.
Peter Schiff tweeted, “Against my advice my son @SchiffSpencer just bought even more #Bitcoin. Whose advice do you want to follow? A 57-year-old experienced investor/business owner who’s been an investment professional for over 30 years or an 18-year-old college freshman who’s never even had a job.” His Twitter followers voted for the latter by a wide margin.
Meanwhile, bitcoin OG Dan Held of the Kraken exchange, advised investors worrying about the correction to pull back and look at the macro picture, tweeting, “Oh no Bitcoin crashes to $10,000. It was $200 five years ago.”
As Asia Times recently reported, former Prudential Securities boss George Ball, a former opponent of cryptocurrency, told Reuters TV (click below) that investors should buy bitcoin “before the fuse is lit.” The fireworks, he said, will begin after the American Labor Day holiday on September 7.
Whether bitcoin and other cryptos will make the V-shaped recovery investors are hoping for remains to be seen. Past performance, as they say, is no guarantee of future results.
Among those urging caution is Harry Leeds of be[in]crypto, who pointed out that the insanely bullish price action of 2017 will not necessarily be repeated and that bitcoin’s top dog status could be challenged as new projects gain traction.
He wrote, “Even the bullish signs don’t mean that bitcoin will just go up. Another currency or virtual machine or smart contract maker could suddenly swoop up all our digital money. The Polkadot team had been working for years to create a product, only to rocket to the sixth highest crypto by market cap in just a few weeks.“
He added, “The drivers of this bull run are both long-term adoption and short-term DeFi speculation. This is very different from 2017’s bull run. It is important to keep in mind that what’s good for the blockchain is not always good for the price of bitcoin (or any altcoins). In 2020, the mantra still holds true: only risk what you are willing to lose.”
At the time of writing (4.20 am in Hong Kong), the price of bitcoin was $10,120, up from an earlier low of $9,949, indicating that investors are indeed buying the dip.