Companies that buy and hold Bitcoin and Ether have largely stopped accumulating after cryptocurrency prices plummeted earlier this month. Is this the end of the corporate bull market?
Do companies no longer want Bitcoin and Ether?
Companies that changed their profile and started buying BTC and ETH "largely" stopped accumulating cryptocurrencies after October 10 and "have not yet taken action in this direction" – repurchasing digital assets, noted David Duong, global director of investment research at Coinbase Institutional. He emphasized that "in the last two weeks, BTC purchases" by companies "have fallen to almost a yearly low."
The slowdown in cryptocurrency purchases signals the sector's caution towards cryptocurrencies.
Not everyone is giving up.
Duong noted that BitMine Immersion Technologies, a company investing in ether, has been the "only consistent buyer" since the market plunged. Since October 10th, it has spent over $1.9 billion buying nearly 483,000 ETH.
The company wasn't deterred by the fact that ether's price was falling in line with bitcoin's. The ETH/BTC pair was bleeding even more than the BTC/USD pair.
In fact, BitMine's strategy is logical: if the company is considering investing in ETH for the long term, it's profitable to buy at the lows, not at the highs.
The key question is whether the bull market is still ongoing. In my opinion, the answer is yes. So far, bitcoin and altcoins have been rising with high interest rates in the background. Tomorrow, October 29th, the Fed will decide on the next rate cut. Much indicates that the cuts will continue at least until the end of the year. Furthermore, Jerome Powell has already signaled that we are approaching the end of quantitative tightening, and therefore – in the longer term – a potential easing, which will translate into spikes in cryptocurrency valuations, as assets considered risky.
At the end of the year, Donald Trump is also expected to announce the name of Powell's potential successor at the Fed. Federal Reserve policy under someone like Trump could also fuel growth, as the president has long been pushing for more aggressive rate cuts.
