Connect with us

News

This Bitcoin bull explains why bitcoin surged and fell this weekend

Published

on

Image Source: Pixabay

At press time Bitcoin was down roughly 6% and was trading in the $56,000 range at press time. This weekend, the price of the crypto asset hiked to more than $60,000, nearly a month after Bitcoin surged to $50,000. However, the asset faced a correction, pulling its price down roughly 10%. Such dips have become an opportunity for companies such as MicroStrategy to purchase the asset.

Even as institutional investors “line up” to buy Bitcoin at its lowest, Mike Novogratz stated that the asset’s latest ‘weekend’ price action is solely due to retailers. Explaining this phenomenon, in particular, the Galaxy Digital founder made an interesting comment. Speaking to CNBC Squawk Box Novoratz believed that the last price hike of Bitcoin was due to retail activity:

What happens on the weekend is retail gets excited you can tell because the cost of leverage goes way up on the weekend.

He further explained that Bitcoin’s price hike may even be connected to President Biden’s proposed $1.9 trillion stimulus package, which recently received approval. According to the former Goldman Sachs asset manager, many young Americans will use stimulus checks to purchase the crypto asset. He claimed: 

A lot of the stimulus checks are going to young people who want to buy Bitcoin

Reiterating his earlier opinion that Bitcoin is an institutional product, Novogratz reminded investors that over the past three or four months, Bitcoin has officially turned into an asset class. 

Novogratz added that this ‘asset’ was not sought after by companies alone as banks and hedge funds will also want to add the crypto to their balance sheets. In this case, whoever does not hold a long position on the asset can only be short. 

With more than 16,00 BTC in the company treasury reserve, Galaxy Digital is the third-largest firm to hold bitcoin, after MicroStrategy and Tesla. The firm’s CEO has lately been curious about alts, such as Cardano’s ADA.  

Where to Invest?

Subscribe to our newsletter

Alisha is a full-time journalist at AMBCrypto. Her interests lie in blockchain technology, crypto-crimes, and market developments in Africa and the United States