Bitcoin, the flagship cryptocurrency, has seen its price remain “shockingly stable,” during this week’s market sell-off that saw the Dow Jones Industrial Average plunge more than 3%. Bitcoin, on the other hand, is down 0.7% this week, and up over 2.7% in the last two weeks.
As CNBC points out the Dow Jones Industrial Average ended 500 points higher this Thursday, October 25, but then started dropping on the next day when disappointing quarterly reports from large tech companies led to the decline.
The sell-off was partly supported by fears of an ongoing trade war between the US and China, and by the European Union rejecting Italy’s budget. Rising interest rates were also partly behind the market’s poor performance.
Meanwhile bitcoin has been trading within a very tight range, as in the past seven days it saw a $6,550 high and a $6,430 low, according to CryptoCompare data. Along with its tight range came low volatility, as it has been less volatile than indexes like the S&P 500 or the Dow Jones.
As CNBC points out the flagship cryptocurrency’s insulation from the broader market’s wreckage seems to be new as in early October it plunged along with the indexes. At the time, the Dow Jones dropped as much as 1,300 points in two days, while BTC dropped 6% in a shorter period, as the crypto market lost $18 billion.
Speaking to the news outlet Brian Kelly, the CEO and founder of BKCM, noted cryptos are now “mostly separated” from the broader markets. He said:
I don't know of anyone saying 'Microsoft dropped, I better sell bitcoin to cover my margin'
Per Kelly, bitcoin may have found its bottom at the $6,000 mark. While he believes retail investors – who helped the cryptocurrency ecosystem reach it $800 billion high – are now “washed out,” he pointed out the market is waiting for institutional investors to step in. Per his words, they’re “coming but it’s slow.”
As CryptoGlobe covered various firms have been developing solutions for institutional investors in the crypto space. Earlier this month, Fidelity Investments, one of the largest financial services providers with more than $7.2 trillion in client assets, announced it was launching crypto custody and brokerage solutions.
A former SpaceX engineer has launched a crypto exchange for institutional traders, while Coinbase has launched several institutional grade products and services, including Coinbase Custody, and Coinbase Institutional Coverage Group. Nevertheless, data from over-the-counter (OTC) trading has shown institutional investors already dominate the market.
Although bitcoin has dropped over 65% since it reached its all-time high near $20,000, the outlet notes that it’s still up year over year. Those who invested in bitcoin back in 2015, three years ago, have seen returns of over 2,300%.