Worst Week Ever? No, Bitcoin Will Rise Again!

Last week, in foreign media dealing with the news of virtual assets, the expression “worst week” came out a lot. This is because bitcoin's decline was large, and the price of bitcoin (BTC) based on the coin market cap has fallen by more than 18% over the past week.

Considering that bitcoin has only continued to rise this year, the decline is significant. However, the term ‘healthy adjustment’ is also coming out because the news of Tesla’s bitcoin investment is much higher than the price before it was announced.

Virtual Asset Analyst Joseph Young commented on Twitter, saying, “We predict that the price of bitcoin will gradually recover.” The basis for this is first, Coinbase premium has turned to ‘+’ and  second, miners have already sold a lot of bitcoins.

Coinbase is the largest virtual asset exchange in the United States, and is widely used by “whales” and institutional investors in the United States. When the buying trend of US investors is strong, there will be a 'Premium' that has a higher bitcoin price on Coinbase compared to other exchanges. Higher premiums mean that American whales are buying more bitcoins.

According to Cryptoquant, the premium, which was sometimes '-' from the 25th to the 26th, completely turned to '+' after the 27th. It means that the buying trend has started again. Cryptoquant CEO also said, “Coinbase premium has turned to '+' through Twitter. They (whales) are coming.”

Some believe that the buying trend has weakened due to the decline in Grayscale's bitcoin trust premium.

In Grayscale, a digital asset manager, there is a bitcoin trust 'GBTC'. Institutional investors who purchase GBTC have a mandatory holding period of 6 months. After 6 months, you can sell your reserves through OTC trading. Investors who buy GBTC in the OTC market can buy GBTC without a mandatory holding period. So, instead of having a mandatory holding period, you pay a premium and buy GBTC. We are accepting the current premium because we expect the price of Bitcoin to rise in the future.

However, as the premium fell below zero, there was an opinion that the demand for bitcoin decreased.

In response, Cointelegraph, a media specializing in virtual assets, analyzed that "This is because demand has shifted to Bitcoin ETF." It is an analysis that the demand of investors for bitcoin has moved to another product rather than a decline.

The Bitcoin Listed Index Fund (ETF), which began trading in Canada on the 18th (local time), raised $600 million (approximately 670 billion won) in one week of launch. It is analyzed that investors who were reluctant to invest directly in bitcoin with the launch of the ETF also started investing. Cointelegraph said, “GBTC was the preferred product when there was no bitcoin ETF.” Demand has shifted to bitcoin ETFs in part.

In the long run, the price of Bitcoin is expected to rise again.