Nearly 80% of Crypto Investors Still Net-Invested in Bitcoin

  • Investor interest in bitcoin remains reasonably high.
  • This after a year-long bear market that took BTC's price down well over 80%.

Bitcoin (BTC) investors remain net-invested in the flagship cryptocurrency despite it losing well over 80% of its value during 2018.

Research data published by DailyFX indicates that investors are beginning to take more interest in bitcoin and other crypto-related investments. According to the market research, investor interest in bitcoin was at its highest in November 2018. DailyFX’s research analyst, Fan Xu, explained: 

Bitcoin: Retail trader data shows 77.5% of traders are net long with the ratio of traders long to short at 3.44 to 1. The number of traders net long is 0.4% lower than yesterday and 6.2% higher from last week, while the number of traders net short is 2.7% lower than yesterday and 6.4% lower from last week.

"Traders Are Further Net-Long Than Yesterday"

Despite the seemingly positive outlook for bitcoin, Xu noted the data analysis suggests BTC's price is not likely to recover anytime soon. According to Xu’s market research: 

Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger bitcoin-bearish contrarian trading bias.

While it’s difficult to accurately forecast future prices of cryptocurrencies, researchers at Element Digital Assets Management predicted in September 2018 that there was a “serious chance” BTC's price would drop below $3,000.

At the time, bitcoin was trading in the $5,500 to $8,500 range (since July 2018) - which was a sign that short-term traders had been dominating the crypto market. Thejas Naval, the portfolio director at Element Digital Assets, pointed out there are “short-term players that are using structured derivative vehicles with leverage to express intraday speculation.”

Meanwhile, the firm’s quantitative research head, Kevin Lu observed that the crypto market was “in an ultra reflexive state [as it had been] moving within a range in response to seemingly every bit of news.”

Vays: 40% Chance BTC Drops To $1,000-$2,000 

Notably, former Wall Street trader and prominent crypto commentator Tony Vays recently revealed that he thinks there’s an 85% chance that bitcoin has not yet reached a bottom. According to Vays’ analysis and his discussion with well-known analyst Murad Mahmudov, there’s a 40% chance bitcoin’s price will hit a bottom between $1,000 to $2,000. There’s also a 10% chance, Vays noted, that BTC's price could drop below $1,000 as most cryptos are still overpriced.

In addition to bitcoin’s price dropping lower, Vays and Mahmudov predicted that ether, cardano (ADA), bitcoin cash (BCH) and XRP could all potentially trade at significantly lower prices in the coming months.

Circle CEO on Whether Bitcoin Is Still 'Attractive' as a Safe Haven Asset

Siamak Masnavi

Circle CEO Jeremy Allaire talked on Monday (August 19) talked about Bitcoin's recent price action and whether Bitcoin can be considered a safe haven asset.

The Circle CEO's comments during an interview on CNBC's "pre-market morning news and talk program "Squawk Box", where he was asked questions by Andrew Ross Sorkin and Joe Kernen, at a time when Bitcoin was trading at $10,702.

Sorkin started the interview by asking Allaire for an explanation of Bitcoin's price action over the past two weeks. Allaire replied:

"Clearly a non-sovereign digital asset like Bitcoin is attractive to people who are interested in moving capital into a place where they can control it themselves. That underscores a lot of interest that’s been there over time. It’s the digital gold thesis and I think a lot of both institutional accumulators of Bitcoin, individuals, very specifically individuals in jurisdictions or environments where the intense concern about capital controls are there. That’s like the underlying thesis and I think that has had an impact on it for the last 8 years."

Next, Sorkin asked Allaire if we should be thinking that money moved out of China (due to the recent political unrest in Hong Kong) into Bitcoin or whether the price of Bitcoin went up because people are speculating that the price of Bitcoin will increase in similar situations in the future. 

Allaire answered:

"Yeah, I think likely it's a mixture of both, and obviously it's not something you can clearly measure at any given time... Last week was a significant risk-off week for equities. You saw there were a lot of holders of digital assets whose broader portfolios were taking a hit and if they had gains, obviously bitcoin is up over 100% almost 200% over the past 9 months or so, that’s a place to take some gains as well. Depending on the type of holder so to speak, you’re going to see slightly different behaviors during these market moves."

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