Matt Hougan, CIO of Bitwinse, a firm that provides crypto-based fund management services, gave his take on the current state of bitcoin prices and their evolution. Hougan stressed that now, the market had what he called ‘value’ buyers, a group presumably integrated by institutions and funds that had decided to purchase bitcoin as part of an organized reserve strategy, like Michael Saylor’s Microstrategy.
Hougan valued the entrance of these new players positively, stating that these, due to their consideration of bitcoin as a reserve asset as part of a methodic consideration of its advantages, would help stabilize the market. In social media, he explained:
Every time [bitcoin] started to retreat, people would start to worry that it was going to $0. That’s now off the table, and there is a growing sea of investors looking for an entry point instead.
Hougan’s considerations underscore the difference between retail market buyers, who were easily swayed by market sentiment to sell their BTC, and this new class of buyers, who would be unfazed by these downswings. In opposition, these would be waiting for BTC to become cheaper to accumulate more, driving prices to recover as recently happened when bitcoin fell from nearly $100,000 to sub-$92,000 prices.
Read more: Crypto Bloodbath: $581M in Derivatives Liquidated Amid Bitcoin’s Fall
This can also be seen as a consequence of bitcoin maturing as an asset that some governments worldwide, including the U.S., consider a reserve. This has reduced the amount of bitcoin available in the market, reducing the damage that a possible massive movement might cause for the wider market.
Read more: Brazil Introduces Bill to Establish Strategic Bitcoin Reserve
Hougan clarified that the market will continue to be volatile, but the intensity of the price changes will subside due to these new players. “We haven’t repealed volatility, of course, but I think we’ve reduced the violence of pullbacks,” he concluded.
