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Bitcoin Crash Exposes a Key Myth
Alex Dobnya
According to Schiff, institutions did not intervene to buy Bitcoin and prevent the collapse
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Prolific Bitcoin critic Peter Schiff has opined that the recent market sell-off debunks the myth that there is strong institutional demand for the leading cryptocurrency.
The gold bug believes that Mt. Gox redemptions alone would not be able to inflict such significant damage if there had been substantial institutional buying. “If such demand actually existed, buyers would jump at the opportunity to buy Mt. Gox Bitcoin off the market,” Schiff said.
AS reported by U.TodayThe largest cryptocurrency fell to a five-month low of $53,330 on the Bitstamp exchange on July 5 after Mt. Gox moved about $2.7 billion worth of Bitcoin to another wallet. The liquidation of their Bitcoin holdings by the U.S. and German governments was also another bearish headwind that exacerbated the market slump.
Will ETF buyers capitulate?
Bitcoin exchange-traded funds gave bulls a glimmer of hope on Friday with inflows worth $143.1 million.
Earlier this week, Schiff said that buyers of Bitcoin ETFs were likely to continue holding onto their coin-based trading activities. The financial commentator predicted that it would take a much steeper decline in Bitcoin for them to eventually capitulate. Schiff believes that such a dramatic price drop could happen as early as this week.
Meanwhile, Nate Geraci, president of The ETF Store, recently pulled down the narrative that there is no demand for Bitcoin ETFs as they occupy the top spots this year after hundreds of launches.
However, Schiff has previously argued that all buyers of Bitcoin ETFs are actually future sellersFurthermore, he predicted that ETF issuers could end up face legal action by buyers due to huge losses.
About the author
Alex Dobnya
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader, and journalist with extensive experience covering everything from price analysis to Blockchain disruption. Alex has written over 1,000 stories for U.Today, CryptoComes, and other fintech media. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets, and can be reached at alex.dovbnya@u.today.