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Institutions have been interested with Bitcoin since it first captured the attention of the globe. In most cases, institutions’ engagement in new technology or assets is regarded as helpful to the development of both parties involved. However, famous cryptocurrency investor Lark Davis disagreed. He believed that institutions were manipulating the market to benefit themselves at the detriment of ordinary investors and short-term holders. In a recent video, he goes into further detail on the issues covered here.
Institutions manipulating Bitcoin?
Davis believed so because the institutions have both the cash and the clout to do this. He provided instances of several well-known people to back up his claims. Guggenheim Investments was the first on this list. Davis accused this Chicago-based worldwide investment firm of purposefully creating misleading representations in order to profit from Bitcoin.
When BTC was picking up pace and rallying towards the $60k ATH of May, Guggenheim Investments’ CIO Scott Minerd in February, said that Bitcoin could eventually climb to $600,000. Talking to CNN he also said that based on the supply and demand as it is with gold, the numbers could go up towards $400k-600k.
Now when Bitcoin has been crashing down and investors have been losing millions of dollars, Minerd changed his prediction. In an interview with CNBC, he said that BTC could soon bottom out at $10,000-$15,000. He also said that the market could move sideways for the next few years before becoming bullish again. On this, Davis said,
“They’re telling you to sell into weakness and then buy when the market is super heated. This is the game these institutions play.”
This news was followed by JPMorgan’s recent statement saying that institutions have no appetite for Bitcoin at this price level. Adding to the same JPMorgan’s note to investors said, “full convergence or equalization of volatilities or allocations [between gold and Bitcoin] is unlikely in the foreseeable future.” In response to this assertion, Davis stated,
“They’re trying to talk you into selling your Bitcoin… but don’t be shaken out by these media FUD stories by these institutions.”
He [Davis] felt that by making such remarks about Bitcoins, institutions would create a market of fear and panic, resulting in significant selling. This would benefit large money guys since they could buy Bitcoin for pennies on the dollar. Davis also stated,
“[These institutions] have proven time and time again to be some of the world’s biggest, most prolific market manipulators.”
Is this true though?
Short-term holders have truly been suffering terrible losses. Short-term holders continue to lose as just yesterday they capitulated awfully. They took losses on par with all the major drawdowns in bitcoin history.
The only ones safe however are the long-term holders who have maintained their positions despite the continuous price fluctuations.
Even miners are accumulating Bitcoin at the moment as is visible from the metrics.
#Bitcoin miner outflows hit a 5-year low yesterday.
Miners are not selling much these days. pic.twitter.com/AXOFdbYMTc
— Lex Moskovski (@mskvsk) June 27, 2021
If there is one important takeaway from this video, then you can heed Davis’ words,
“Keep calm, stack sats”