Many crypto owners have heaved a sigh of relief this week as the market went green again. This little upward arrows indicating that the market is once again moving in a pleasing direction. At the time of writing, Bitcoin remains above $9,000 after two weeks of gains and the total market cap hit a 7-week high and has some 37.3% of the market with a capitalisation of around US$156.4 billion.
What has caused this sudden reversal of fortune after a very depressing few weeks? There is plenty of speculation about this. One popular theory is that it is a
post-Tax Day bull run in the United States. Now that everyone has paid their tax bill, they are back in the crypto investment business and making the most of buying in the dip. According to CNBC, Tom Lee, co-founder and head of research at Fundstrat Global Advisors, told his clients that “the winter is ending for Bitcoin” after tax-related selling fades.
Another theory is that an increasing number of traditional investors are turning to cryptocurrencies, because they provide an alternative form of investment. We have seen some famous cases of this over the last few weeks, with the Soros Fund Management firm getting the green light from George Soros to invest in crypto. This was something of a surprise, considering the mega-investor seemed to be in the mood to wage war on crypto only a couple of months back.
Rockefeller, another famous name, has also dipped its toes in the water through its investment arm VenRock, which has also partnered with crypto startup, CoinFund with the aim of collaborating in more blockchain ventures.
All this seems to have made some of the big investment players take a pause and another look at crypto. Jacob Pouncey — an analyst from SaxoStrats in-house team of strategists — wondered whether crypto-assets were “entering a new cycle.” He said: “The inflow of institutional capital to the cryptocurrency market due to the increase in regulation and investor protection could lead cryptocurrencies to a positive quarter.”
It’s all looking very optimistic and successful positions should bring significant trading gains this week — and hopefully next week and beyond.