Blockchain headlines have been rife with bad news lately. KuCoin suffered a serious hack on September 26; Two US regulators tracked BitMEX on October 1st. The UK’s Financial Conduct Authority (FCA) banned crypto derivatives on October 6th. and news came that US economic talks had stalled around October 9th.
However, the price of Bitcoin (BTC) seemed largely unimpressed despite this string of seemingly unfavorable stories. This could indicate upside potential in the coming weeks, according to a report by crypto investment solutions company CoinShares on Monday.
“It tells me that owners are not nervous and that leverage is low – a theory backed by wallet activity and traffic – and skews my near-term price expectations from neutral to positive,” wrote Danny Masters, Executive Chairman of CoinShares.
In the days following each of these events, Bitcoin price held out for the most part, falling only marginally compared to its usual price activity, and often rising shortly thereafter.
“In my 30 years in trading, my top golden rule has been to trade when the news has not coincided with price movements,” wrote Masters. “After dealing with crypto during MtGox, the China ban, Bitfinex hack, Trump comments and many other market-breaking stories that have shaped the history of Bitcoin, I was impressed by the lack of negative price movements, particularly around BitMEX” Masters added after noting the FCA and BitMEX events as recent, possibly bearish, events.
Bitcoin has gained a number of major mainstream participants in the past few months, including to protect these speculators’ capital against inflation. Masters describes these key participants in the first part of the report, citing Square and MicroStrategy as two examples. MicroStrategy allocated $ 425 million of its treasury reserves to Bitcoin between August and September. Square raised around $ 50 million in Bitcoin in early October.
“We believe these moves are just the beginning of a diversification strategy for the Treasury Department that will appeal to technology and payments companies around the world,” Masters wrote.
Earlier this year, billionaire hedge fund manager Paul Tudor Jones made his own heavy bet on Bitcoin as a hedge against inflation.