Coinshares CSO Meltem Demirors says the recent crypto plunge, with Bitcoin trading at $5,560 at time of writing, is due to institutional caution surrounding the Bitcoin Cash hard fork.
Demirors told CNBC that fear, uncertainty and doubt surrounding the Bitcoin Cash hard fork triggered the crypto market crash.
“It’s probably some institutions, some funds, de-leveraging, taking some money off the table. Any time there are forks, things tend to trade weird and strange and people are trying to take some risk off the table.”
She says that the caution isn’t isolated to the crypto market, noting that the world’s largest asset manager Blackrock has seen its first outflow in three years. Within the crypto market, she notes Bitcoin’s dominance is holding above 50%.
“Bitcoin is the asset that’s held strength. It’s over 50% dominance right now. I think all other assets that are not Bitcoin are in the midst of a liquidity crisis. What we’re seeing across the board is asset prices are down 75% or more, in some cases 95% or more, very thinly traded. Over 80% of the assets on the market today had less than $10 million in weekly trading volume.”
[the_ad id="42537"] [the_ad id="42536"]She credits Bitcoin’s strength to the fact that it was the first cryptocurrency on the market.
“During the dot com boom, companies that were created in the first six years were the ones that survived, which to me indicates there is a first-mover advantage in the crypto game, which is why we’ve seen Bitcoin, which just hit its 10-year anniversary, has performed fairly well over time.”
Unfortunately Demirors thinks some altcoins are in trouble, noting,
“We’re now at a point where projects are running out of money. They’re going to need to start firing employees. They’re going to need to cut costs. We’re going to see consolidation, and some of these assets inevitably will get marked to zero.”
