Bitcoin’s price decrease has led to various speculations and theories about the reasons behind the unsatisfactory performance of this digital asset. Some believe that the decline in Bitcoin's value is due to institutional strategies, technological threats, or fundamental market cycles.
Recently, the market has even speculated that the cause of Bitcoin's fall is a pattern of mass dumping at 10 a.m. by the capital market company Jane Street. Some time ago, the market also accused Binance of playing a role in the decline in Bitcoin prices.
However, Bitwise Chief Investment Officer Matt Hougan has a different opinion. According to him, the reason for Bitcoin's fall is much simpler. Long-term Bitcoin holders are reducing their exposure to Bitcoin. According to him, investors are selling spot Bitcoin, closing leveraged trading positions, and using covered call strategies, creating downward pressure on prices.
Hougan said Bitcoin prices are influenced by three factors. The first is Bitcoin's four-year cycle. Historically, Bitcoin prices often follow the same pattern every four years.
The second factor is concerns surrounding quantum computing, which poses a threat to Bitcoin's security. Canadian businessman Kevin O'Leary even warned that institutional investors are limiting their Bitcoin investments to just 3% until the crypto industry comes up with a credible solution to address quantum vulnerabilities.
The last factor is the shift of capital from crypto to Artificial Intelligence (AI) startups, which are currently considered more promising.
Hougan also added that the Bitcoin selling phase is almost over. He said that Bitcoin is in the process of bottoming and will eventually reach a new all-time high.
Also Read: What is Bear Market: Definition, Characteristics, and Strategies to Face It in the Crypto World
