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“When we reach all-time highs, we always see corrections. “I believe it is a natural part of the cycle,” Kraken Australia CEO Jonathon Miller said.
According to Kraken Australia CEO Jonathon Miller, Tuesday’s Bitcoin (BTC) drop was a natural correction after BTC was “dragged up” by the overheated Ether (ETH) and nonfungible token (NFT) markets.
In its August report, Kraken notes that the supply of Ether on centralized exchanges fell to a three-year low of 12.8% at the start of the month, concluding “the likelihood of supply shock capitulating ETH higher is greater.”
Miller added that there was a “huge run-up of trading activity” leading up to Ethereum’s much-anticipated London upgrade, and that demand for Ether has been consistent since.
Miller attributes recent crypto rallies to the NFT frenzy, as well as the hype surrounding Ethereum upgrades and the execution of Ethereum Improvement Proposal 1559.
According to Kraken’s research, the NFT industry had a surge in August, with OpenSea’s daily users growing 289 percent and transaction volume increasing 900 percent on a weekly moving average.
“The combination of Bitcoin being […] dragged up a little bit by Ethereum, Ethereum getting super hot because of all the activity on NFTs, I think there’s a bit of a natural curtailment happening,” he said, adding:
“When you’re starting to see Sotheby’s auctions and the numbers going around for NFTs — these are high levels. We always see corrections when we get to all-time highs. I think it’s a natural part of the cycle.”
“Bitcoin’s had a big run-up again from a previous dip. It does this, we know that,” he added.
Miller also mentioned the excitement surrounding the implementation of El Salvador’s Bitcoin Law as one of the “heady reasons” contributing to Bitcoin’s recent advances, admitting that some investors may have planned to sell on the Salvadoran news:
“The timing of the El Salvador thing, I don’t think you could ignore it […] This is a pivotal turning point in terms of the adoption story for Bitcoin.”
“I saw photos of two on Twitter of people buying McDonald’s and Starbucks in El Salvador with Lightning,” he added.