The digital asset management company of institutional investors, NYDIG, announced its interest in buying bitcoin after a decline in the exchange rate on Sunday.
"Our platform has been exclusively on the buyer side for the past 24 to 48 hours," wrote Greg Cipolaro, head of research at NYDIG, in today's newsletter.
The price of bitcoin has risen to new highs around $65,000 over the past week, before plummeting to $51,000. At the time of publication, bitcoin is listed at about $56,000 with an increase of 90% since the beginning of the year. The growth is associated with the interest of institutional investors, due to the desire to hedge the inflation of national currencies.
"During these risk-averse periods, institutional investors are adopting a buy-on-pullback mentality, which suggests an increasing bias on their part towards bitcoin volatility," Sipolaro writes. – We believe that the root cause of the sale is in the positioning of investors, and not in the fundamental news. In other words, traders used large amounts of borrowed capital in long positions, which resulted in forced liquidations."
He also noted the significant excess of the price of bitcoin on the Coinbase exchange over the levels of Binance: "The difference in the spot market, which is usually very small, at some point reached 3%. We believe this data points to a source of selling pressure in Asia, not North America."
At the same time, Bloomberg senior strategist Mike McGlone warns of the presence of a deflationary movement that negatively affects the prices of commodities, including bitcoin as a means of hedging inflation.
"The fact that the world's most important commodity, crude oil, is trading at the same level as it was 16 years ago, despite unprecedented monetary stimulus measures, suggests that deflationary forces are entrenched," McGlone writes.
Since the financial crisis, commodity prices have declined by 60% relative to the US M2 money supply, while the S&P 500 index has outperformed it by 40%, according to a Bloomberg report.
"The stock market tide must continue, or deflation will prevail," McGlone said. "If WTI doesn't hold above $70 a barrel, little can stop the same deflationary forces that marked the peak of US ten-year government bond yields of around 3% in 2014."
Data from a new report from CoinShares showed that over the past week, the inflow of assets into investment products based on cryptocurrencies amounted to $233 million, surpassing the values of the previous week by almost three times.
"Inflows this week were unusually distributed among digital assets," the firm writes, noting that bitcoin attracted $108 million and ether $ 65 million, an impressive amount relative to the capitalization of the two cryptocurrencies. - XRP was among the most popular and attracted $33 million, which led to an almost twofold increase in assets in products based on it to $83 million. Digital asset-based investment products showed significantly higher turnover this week. It corresponds to a 59% rise compared to the previous week and the levels of the beginning of February."