Institutional profit-taking, according to Raoul Pal, is the most likely cause for recent Bitcoin sell-offs, but that the selling is likely over for the time being.
The current volatility in the Bitcoin price, according to Real Vision CEO Raoul Pal, is due to institutions selling to help shore up their end-of-year earnings.
In a Dec. 27 interview with Vlad from The Stakeborg Talks, the persistent Bitcoin (BTC) bull states the market is currently in skew due to the effect of institutions. They’ve been selling to lock in earnings, according to Pal. It a way for businesses to say, “I believe in compensation”
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The timing of the selling points to institutions unloading some bags, given that much of the selling in December came from wallets that accumulated Bitcoin around the summer, according to Glassnode, and that institutional assets under management (AUM) of cryptocurrency surged in May and October, according to Coinshares.
Pal inquired, “Now the question is, ‘Are they done?'”
“It looks like they’re done because the market has been chopping around for the past week,”
“which was the traditional last week of everybody squaring their books.”
While he expects more selling out of Asia. Also, Pal believes that the crypto markets will get off to a strong start in 2022. Even, as institutional capital is redeployed.
Pal predicts that institutional investors will become increasingly bullish on cryptocurrency by the end of the decade. Also, as they gain a better understanding of the technology’s growing usage “and hence what that implies in market size.”