After Wednesday’s crypto crash that left bitcoin trading at the $7,500 level, many investors never thought they’d see this kind of buying opportunity again. Now market leaders are predicting that the BTC price could have further to fall before regaining its upward momentum alongside improving fundamentals, which if they’re right could play out before the end of the year. Still the bitcoin price downturn has taken a toll on sentiment in the crypto market.
As a veteran trader, bitcoin bull Mike Novogratz, who predicted bitcoin’s tight trading range months ago, is able to see the forest from the trees. Now that the BTC price has dipped below $8,000 and the bulls and bears wrestle for control, things could go either way in the short term. In an interview with CNBC, Novogratz seemingly remains bullish, as evidenced by a new bitcoin fund that Galaxy Digital has in the works and that will come “in time.” But he also doesn’t pull any punches about the direction of the bitcoin price.
“I’m hoping it holds here. $6,500 would be the next downside…I think you got to get back through $8,200 first and if it gets back through $8,200 we’re then back at the $8,000-$10,000 range. It’s going to need new energy to really make the big move,” said Novogratz.
— Squawk Box (@SquawkCNBC) October 24, 2019
There are some catalysts that could create those positive vibes, one of which the crypto community put a lot of stock in only to be disappointed by its debut and that’s Bakkt. The ICE-backed bitcoin futures exchange started trading physically delivered BTC in September to little fanfare, and the bitcoin price has been stuck in a rut ever since. Slowly but surely, however, Bakkt is getting closer to reaching its potential and attracting institutional capital.
“The NYSE’s Bakkt just got set up. There’s a futures exchange that’s starting to gain some volume. But more importanly, they’ve got a custody solution that is just coming online that’s going to get approved…world class custody which allows more and more people to get comfortable with it.”
When the new Galaxy Digital bitcoin fund does make its debut, it will streamline the BTC buying process and remove some of the pain points for investors.
“It’s just a bitcoin fund that takes care of custodying it, takes care of pricing it…It’s got one-week liquidity. So it just allows people to invest in bitcoin without setting up a Coinbase account, without worrying that their phone is going to get lost.”
Clearly, things are happening in the bitcoin space slowly but surely. As eToro Senior Analyst Mati Greenspan points out, Bakkt experienced its highest bitcoin futures trading volume ever of nearly $5 million across 640 contracts on Wednesday.
These green shoots may not be blockbuster numbers but they’re a sign of BTC futures trading moving in the right direction and institutional capital seemingly coming off of the sidelines.