Bitcoin's weekend fall indicates the growing influence of Wall Street dealers

The stony weekend of Bitcoin was one of the first time that a storm triggered large waves in cryptocurrencies in traditional financial systems and underlines how large investors play an increasing role in the markets for digital assets.

The price of the largest cryptocurrency according to the market value fell to $ 42,222 in the early morning of the Londoner in the early morning of the London, according to FT Wilshire's Blended Bitcoin price index, which is pursuing the trade in leading crypto bears.

The flash break by 20 percent was only a few hours after the end of a volatile week on Wall Street, in which stocks and bonds fluctuated to possible changes in monetary policy and the spread of the new Coronavirus stem.

The crypto weekend shock indicates that this is usually tied to these traditional assets, which is usually somewhat more separate, especially now that large institutional investors are more involved.

"This started as a risk-off movement in traditional macro circles [which] triggered some crypto liquidations," said David Fauchier, portfolio manager at the specialist for digital assets Nickel Digital.

bets worth more than 2.5 billion as a binance.

On crypto futures exchanges, retailers who have increased their bets through borrowing are generally extinguished when the price of a digital token is achieved a certain threshold, the so-called liquidation price.

LIM added that the rapid decline also positions worth over 5 billion

Bitcoin prices have risen by more than 500 percent in the past two years, with some investors-mainly amateur small investors, but also some professionals-were attracted to the theory that the returns could not correlate with other assets. But the more hedge funds and other major investors get involved, the closer the connections to other markets.

Many professional investors were also interested in converting paper gains before the end of this year into real returns, which contributed to the sale, said Jan Stromme, founder of the crypto trade company Alphaplate.

"I expect an increasing correlation between risk mood in traditional markets and [Digital Ones]," added Fauchier.

The resolution of the Coronavirus, weak employment data and comments by the Federal Reserve, Jay Powell, who indicated an earlier than expected increase in interest rates, shouted at the investors to rethink their bets and get off from assets that thrive in strong global growth.

“[Bitcoin’s Sell-Off Gathered Pace] as the general market constant,” said Lim. This reminds that Bitcoin is considered one of the safer cryptocurrencies compared to even more volatile bets such as Dogecoin, but is still susceptible in moments of the market nerves.

The prices did not relax on Monday and Bitcoin was traded at $ 48,900.

professional investors who dive into crypto in general lack the almost religious belief in digital assets that are common under the hardcore fan base of small investors who insist on holding digital coins.

"We have to consider that it is only another risky asset that will recover when the world is good and sold out if this is not the case," said Beat Nussbaumer, a Swiss foreign exchange dealer and portfolio manager. Early private buyers of crypto had welcomed institutional investors on the market, hoping that they would drive the price up, but the sale at the weekend indicated that new weaknesses were also introduced, he said.