Alex Tapscott, co-founder at Blockchain Research Institute spoke about the current situation of the market with Bitcoin’s price falling down which has created a lot of FOMO and FUD in the market.
Tapscott said that the market crashes in crypto-world are common and that it is not one single reason or an event but many factors that have led to the bear market. He continued:
“I think that the high that we reached last year was an artificial one that was based on a lot of hot money entering the sector and pushing valuations up to a level that was totally unsustainable. So I think most of the correction that we’ve seen so far has been very healthy. I think what’s happened in the past couple of days or a couple of weeks has basically been a flight to liquidity.”
He added that a lot of investors who had invested earlier were trying to liquidate to something that has more fungibility and liquidity. In addition to the above statement, he said that investors are redeeming their investments “which are nearing the 1-year maturity dates”, he continued:
“There are a lot of projects who’ve raised money over the past year who are looking at their treasury basically evaporating because they still hold a disproportionate amount in ether and bitcoin and they’re essentially trying to liquidate fiat as quickly as possible so it’s sort of a perfect storm of a number of things.”
The Blockchain Research Institution co-founder summed his reasons for the plunge of Bitcoin’s price saying that it was a perfect concoction of overvaluation of the prices, prolonged bear market and the rush to liquidate from investors.
Moreover, he said that the history of Bitcoin shows bear markets that had recovered quickly and some bear markets that had lasted for a long time. He went on to say that people who were expecting the price of Bitcoin to shoot up just because the entry of one or two financial institutions were going to be waiting for a long run.
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