Bitcoin has taken a downward path, but while the move may not look great on paper, it turns out that things are looking pretty good for some of the institutional traders who have yet to enter the cryptocurrency arena.
Many institutions are using the recent drop in bitcoin prices as an opportunity to buy at a lower price and get their hands on an asset that many companies have been crazy about in the past six months.
Bitcoin suffered a bad drop
Things really took a turn for the better in August last year, when companies like MicroStrategy started buying tons of BTC and commenting that it was an important asset for anyone involved with cryptocurrency. From there, many other institutions - such as Square, MassMutual, and Stone Ridge - began to make their way into the crypto space, and the price of bitcoin began to rise at an alarming rate.
However, no one could have predicted Tesla's latest institutional move, which two weeks ago bought about $ 1,5 billion of the world's largest cryptocurrency asset.
However, all of this was done at a time when bitcoin was trading in the $ 50.000 range. Now, it has dropped by around $ 10.000, which some believe to be a healthy fix, but in any case, many institutions see this as an opportunity to finally test it.
Aside from bitcoin, other altcoins also seem to be feeling the sharp decline. Assets like Ethereum, Ripple's XRP and Stellar are all suffering at the time of writing. quotation in real time), although some elect - like Cardano - are recording slight gains of around five percent at press time.
Many people seem to believe that things will eventually recover once Coinbase goes fully public. The popular cryptocurrency exchange has just filed documents to be listed on the Nasdaq, and many analysts and industry experts think this will set things up for a major shift in the crypto space.
What is Coinbase's mission
Our mission is to create a financial system that is open to the whole world. We are building the crypto economy; a fairer, more accessible, efficient and transparent financial system for the Internet age that exploits cryptographic assets. These are digital assets built using blockchain technology.
We need to be prepared for price fluctuations. Additionally, the company warned that volatility is unlikely to go away anytime soon and that traders, along with cryptocurrency-based companies, need to be prepared for this. Coinbase explained:
Our operating results have and will experience significant fluctuations due to the highly volatile nature of cryptocurrencies. Most of our net income comes from bitcoin and Ethereum transactions. If the demand for these crypto assets declines and is not replaced by a new demand for crypto assets, our business, operating results and financial condition could be adversely affected.