Opinion: If Bitcoin (BTC) Drops to $10K Institutionals Will Still Buy It

Opinion: If Bitcoin (BTC) Drops to $10K, Institutionals Will Still Buy It

Source: Coin360

A possible dramatic drop in the market and bitcoin is causing conflicting predictions. Some analysts believe that we are on the eve of the new crypto winter. Others are confident that the market decline will be short-lived, as institutionals buy BTC at the lows, and this will cause a quick bounce in the price and market recovery.

Several negative factors led to the fall of BTC almost 2 times from the maximum price above $64K reached on April 14. Currently, the resistance level is $40K, BTC has tried to overcome it several times but failed. The fall of the first cryptocurrency was provoked by a discussion about the low energy efficiency of bitcoin and by the Chinese authority’s decisions aimed against cryptocurrencies.

Fiat market experts are trying to use the situation to counter cryptocurrencies. In particular, JPMorgan Chase CEO Jamie Dimon, known for his negative attitude towards digital assets, reiterated his warning to stay away from cryptocurrencies (“Buyer beware ‘on cryptocurrencies”).

Daimon stated this while speaking at the U.S. House Financial Services Committee. However, he stressed that this is his personal opinion and he does not prevent the bank from developing services in support of bitcoin. JPMorgan, in particular, is creating an actively managed bitcoin fund for its clients. And the bank’s managers recommend clients diversify their portfolio at the expense of BTC, investing about 1% of funds.

Companies that invest in commodities are also in a hurry to take advantage of the cryptocurrency market drop. Brett Heath, CEO of Metalla Royalty & Streaming, said cryptocurrencies could trigger a new global financial crisis, such as the dot-com bubble or the mortgage crisis in 2008.

Brett Heath believes that both crises had one cause – the massive introduction of an unexplored product. The same is happening now with cryptocurrencies. Metalla Royalty & Streaming provides access to investments in precious metals. Obviously, its head, Brett Heath, is trying to get back the market share that cryptocurrencies have already taken from gold and other precious metals.

Meanwhile, bitcoin remains the main cryptocurrency, with Bitcoin Dominance rising above 40% again. Institutional investors really see it as a replacement for gold and are constantly replenishing their BTC reserves when the first cryptocurrency drops in price.

During the crash on May 19, whales bought 77,000 BTC, according to Chainanalysis. When bitcoin dropped to $30K, players started to withdraw cryptocurrency from exchanges, most likely to cold wallets. This was the largest bitcoin withdrawal in a year, over 175,000 BTC. These actions put bitcoin back on a rising trajectory. Some experts are confident that after the correction ends, the BTC rally will continue, and at the end of the year, bitcoin may be worth $80K – $85K.