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August 9, 2022
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Bitcoin

Analyst explains Bitcoin’s high volatility over the weekend

Galaxy Digital CEO Mike Novogratz sees Bitcoin being boosted by retail trade over the weekend

At the time of this publication, Bitcoin was down about 5% and traded in the $ 56,800 range. This weekend, the price of the asset rose to more than $ 60,000, almost a month after Bitcoin rose to $ 50,000. However, the BTC has undergone a correction, pulling its price down by around 10%. These declines have become an opportunity for companies like MicroStrategy to acquire the asset.

Even with institutional investors “lined up” to buy Bitcoin for the lowest price, Mike Novogratz said that the latest BTC ‘weekend’ price is due exclusively to retailers. Explaining this phenomenon, in particular, the founder of Galaxy Digital made an interesting comment. In an interview with CNBC Squawk Box, Novoratz believes that the latest increase in the price of Bitcoin was due to retail activity:

“What happens at the weekend is that retailers are excited, you can see why the cost of leverage increases over the weekend.”

He further explained that the increase in Bitcoin’s price may even be connected to President Biden’s $ 1.9 trillion stimulus package, which recently received approval. According to the former Goldman Sachs asset manager, many young Americans will use stimulus checks to buy the crypto asset. He claimed:

“Many of the stimulus checks go to young people who want to buy Bitcoin”

Reiterating his earlier view that Bitcoin is a institutional product, Novogratz reminded investors that, over the past three or four months, Bitcoin has officially become an asset class.

Novogratz added that this “asset” was not only sought after by companies, as banks and hedge funds will also want to add cryptocurrencies to their balance sheets. In this case, whoever does not hold a long position on the asset can only be sold.

“Many of the stimulus checks go to young people who want to buy #bitcoin,” says @novogratz. “What happens at the weekend is that retailers are excited, you can see why the cost of leverage increases over the weekend.”

With more than 16.00 BTC in the company’s cash reserve, Galaxy Digital is the third largest company to hold bitcoins, after MicroStrategy and Tesla. The company’s CEO lately has been curious about alts, like Cardano’s ADA.

Source: AMBCrypto

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