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Bitcoin [BTC]: There is no liquidity in the market to absorb the sell-off, says Bart Smith

Priya

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Bitcoin [BTC]: There is no liquidity in the market to absorb the sell-off, says Bart Smith
Source: Unsplash

Bitcoin [BTC], the biggest cryptocurrency by market cap, continues to be the talk of the town. However, the cryptocurrency which was making buzz to the news related to the regulators and the ETF, is now up in the lights because of its price. The coin has been seeing a continuous downfall in the market, showing no signs of hitting the stop button.

The coin has also lost a huge chuck of its market cap, hitting its all-time low for the year by breaching the $80 billion mark. According to CoinMarketCap, Bitcoin is trading at $4481.01 with a market cap $77 billion. It has a trading volume of over $6 billion and has plunged by 24.06% in the past seven days.

Bart Smith, Head of Digital Assets at Susquehanna International Group, spoke about the possible reason behind Bitcoin’s price fall and whether it has found its bottom, in an interview with CNBC Fast Money.

He stated that there were a few factors which led to Bitcoin trading at this rate. The first reason is the on-ramp for new capital being very difficult. Smith added that it is still very difficult to buy Bitcoin the way they want to in the west from their global institutions. He said that a wealthy individual prefers to invest through Fidelity or Bank of America than invest in a cryptocurrency exchange that request for an image of their drivers license.

Smith went to say that this has resulted in the second problem, the inadequacy of liquidity. He added:

“And so we’ve seen kind of a stable price all summer we talked about it on the show. It was at $6,000, give or take, but volatility got a really, really light at the end of October”

He further spoke about the recent Bitcoin Cash hard fork, which was the in the limelight because of the drift in the community. Smith stated that this split does not necessarily create a tremendous amount of confidence. He said:

“When those sellers come in, there’s just no liquidity to absorb it. So without these on-ramps, that hopefully with Bakkt and Fidelity and further regulation in 2019, there’s not going to be capital to soak it up and so when you have sell-offs like this, you can absorb it.”





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Bitcoin

Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021

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Bitcoin [BTC] will likely reach $100,000 with a market cap of over $2 trillion before the end of 2021
Source: Unsplash

The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.

According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.

Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,

“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”

Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,

“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”

Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,

“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”





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