There are many debates about the role of Bitcoin as an investment, despite international crises and a weak crypto market. Is it just another asset of risk?
Ki Young Ju, CEO of CryptoQuant, a crypto market analytics company, recently tweeted his thoughts. He believes that the asset’s “digital golden” narrative will continue to be valid as long as institutions such as MicroStrategy keep buying Bitcoin.
Understanding Bitcoin’s Basics
Ju shared his thoughts as a response to a thread posted by Sam Bankman Fried (SBF), FTX CEO. The billionaire owner of an exchange shared his personal thoughts on how Russia’s invasion of Ukraine has affected crypto prices and why.
Bitcoin’s price plunged to below $35k after yesterday’s invasion, but recovered to $36k by the time this article was written.
SBF, based on Bitcoin’s “fundamentals”, predicted that Bitcoin would not have moved in any direction. Although war might encourage people to withdraw their cash from the asset, it could also motivate them to change to stronger currencies.
Bitcoin’s 21 million coin supply is limited, making it the most difficult currency on Earth. Some consider it to be capable of replacing the dollar. Its production difficulties are similar to gold, which gives it the nickname “digital gold”.
SBF believes that Bitcoin’s recent decline was caused by algorithm followers rather than fundamental investors. He claimed that Bitcoin fell by exactly 8% due to the push-pull dynamics between these groups.
Follow MicroStrategy. Says Ju
CryptoQuant CEO came in to comment. He said that there have been “no significant activities on-chain” in response the war, which suggests that SBF’s thesis regarding fundamental investors was correct.
Ju. stated that institutions who purchased $BTC via onchain txns appear to have not yet sold their holdings. Ju. “Institutions that run algorithmic trading bots believe BTC to be a tech stock.”
He concluded that he would prefer to remain exposed to Bitcoin until Michael Saylor, CEO of MicroStrategy, sells any of his. He stated that the digital gold narrative was still valid as long these institutions have Bitcoins.
Saylor’s company, which reportedly holds more than 125,000 bitcoins as of February, is one of the largest Bitcoin holders. Bloomberg recently reported that Saylor, the CEO, has called Bitcoin “digital gold” and repeatedly said that the asset is his personal treasure.
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