Get 40% Off
🔥 This hedge fund gained 26.16% in the last month. Get their top stocks with our free stock ideas tool.See stock ideas

Bitcoin Eases as Crypto Market Cap Falls Further Below $1TN

Published 01/26/2021, 03:21 PM
Updated 01/26/2021, 03:32 PM
© Reuters.
JPM
-
BTC/USD
-
ETH/USD
-

By Yasin Ebrahim

Investing.com – Bitcoin fell Tuesday, pressuring the total cryptocurrency market cap further under the $1 trillion market, but market participants continue to suggest the path of least resistance remains higher amid data pointing to strong underlying demand for popular cryptocurrency.

Bitcoin fell 4.74% to $10,897, but remained below its session high of $12,153. 

The value of the total crypto cap fell further below $1 trillion to $952.11, though data from Coinshares showed investment inflows hit a record of $1.3 billion over the past week following a period of minor outflows, CoinShares noted. 

The growing interest in bitcoin from intuitional investors comes as the popular crypto has shown clear "portfolio diversification benefits," and fits into trend of Wall Street investments into the digitization, Coinshares chief executive Jean-Marie Mognetti, said in a CNBC interview on Tuesday.

The demand, however, remains heavily skewed in bitcoin's favor even as Ethereum's surge to all-time highs has garnered some of the spotlight of late. Bitcoin attracted about 97% of total crypto inflows so far in 2021, CoinShares said in a report released earlier this week.

In a sign that 'hodl' in bitcoin is paying off, Wave Financial, the digital assets unit of Wave Financial Group, reported returns that more doubled in its first year of trading.

The Wave BTC income & growth digital fund, which uses a call options strategy to trade on bitcoin’s volatility, posted 145.8% annual returns following its first full year of trading.

"WBIG is a fund that is specifically designed to provide investors with significant exposure to bitcoin, whilst offsetting volatility from such exposure and with the aim of generating a stable return," said Matteo Dante Perruccio, president international at Wave.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Still, others point to signs of a slowing pace of funds in more sizeable funds like Grayscale's $20 billion bitcoin trust as a reason that the largest crypto will remain in a period of consolidation after piercing above the $40,000 level earlier this month.

The pace of inflows into the $20 billion  Grayscale Bitcoin Trust "appears to have peaked" based on four-week rolling averages, JPMorgan (NYSE:JPM) strategists led by Nikolaos Panigirtzoglou said in a note last week.

"At the moment, the institutional flow impulse behind the Grayscale Bitcoin Trust is not strong enough for Bitcoin to break out above $40,000," JPMorgan said.

Looking ahead, there is "risk is that momentum traders will continue to unwind Bitcoin futures positions," the strategists added.

Latest comments

I wish it was 10k again lol so I cud load up
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.