Bitcoin may have solidified a base price thanks to the purchases of the big players in conventional finance.
BitMEX recently faced a major legal action in the U.S., and KuCoin was heavily hacked, all of which occurred in a span of just days, but why didn’t these events negatively affect Bitcoin’s price? Aleks Svetski, CEO of Amber, a Bitcoin Profit investment application, said this has to do with several factors, including the big players that buy Bitcoin (BTC).
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„The price of Bitcoin is a function of global demand against a tight and immutable supply and a declining schedule,“ he told Cointelegraph, referring to the supply of coins from the asset and the halving of mining rewards.
„As more people, especially large-scale organizations seek to acquire some, it will not only create a floor price, but will continue to increase the upward pressure on the price,“ he explained, „and eventually all these new players have their Bitcoins off the exchanges, and therefore are not available for sale in the market.
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Throughout this year, a number of major players in conventional finance have made major purchases of Bitcoin, including MicroStrategy, Paul Tudor Jones, and Square.
In contrast to the bullish action, the crypto-currency exchange, KuCoin, was hacked to the tune of over US$100 million stolen. Several days later, US government authorities attacked the important derivatives exchange, BitMEX, with legal actions, arresting one of its leaders.
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However, none of these events caused Bitcoin to fall into a downward trend. Bitcoin didn’t fall significantly after the KuCoin news, and only suffered a small drop after the BitMEX news was released, a relatively small reaction to such important news. On the contrary, after a price sideways action over several days, the asset began its upward journey away from its consolidation levels. Svetski added:
„This is preparing an extraordinary run and no exchange hacking, stimulus delay or state policy will be able to stop it“.