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Yusko claimed âInvestors drive long term value, speculators drive current price.â
The motivation and time horizon for entering Bitcoin (BTC) will ultimately dictate whether investors succeed in this new asset class, according to crypto pioneer Mark Yusko.
On Friday, the CEO of Morgan Creek Capital Management commented on the recent wave of negative headlines concerning Bitcoin. In a series of tweets, Yusko said financial institutions are justifiably concerned about Bitcoinâs disruptive impact and will use whatever means they have to slow its adoption.
The normal response to Bitcoinâs threat is to âerect barriers to adoption and innovation,â Yusko said, adding:
âWhen threatened, incumbents always turn to influence of governments to try and slow adoption of new technology through onerous regulationâ
Ultimately, this has been âa losing strategy for centuries,â he said.
In the meantime, speculators seeking short-term exposure will continue to influence Bitcoinâs price by reacting to headlines. Theyâve had no shortage of negative news in recent days, with China seizing $4.2 billion worth of crypto assets and Coinbaseâs Brian Armstrong foretelling of potentially damaging Bitcoin regulations.
However, he believes that investors with a longer time horizon are more likely to succeed as Bitcoinâs fundamental narrative strengthens:
âInvestors are long-term holders focused on Value & Speculators are short-term holders focused on Priceâ
Bitcoin holders are notorious for their low time preference, meaning they defer immediate gratification for long-term gain. In this case, the "long-term gain" is a paradigm shift in societyâs understanding of money.
Bitcoin holders, or HODLers as theyâve come to be known, appear to have strengthened their conviction amid the latest market melt-up. Case in point: 61% of Bitcoinâs supply has not moved for over a year despite BTC being profitable for over 99% of its history.
On the price front, Bitcoin peaked north of $19,200 last week. In the process, BTCâs market cap ballooned to $352 billion;Â a new all-time high. The asset is currently trading below $17,000 after a heavy correction on Thursday.
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