Current Bear Market Would Be An Opportunity For The Hodlers
The risk-benefit ratio would be “the most favorable” against any liquid asset in the world. Bitcoin would be ready for mass adoption in the next five years.
The co-founders of the Bitcoin hedge fund, Adamant Capital, published a report stating that the phase in which the bear market is located is the most favorable for long-term investors or hodlers.
Tuur Demeester and Michiel Lescrauwaet published Bitcoin this Thursday in great accumulation. This analysis indicates that bitcoin has recovered from a phase of capitulation that took place in November 2018 (when the hopes of a rapid price recovery were frustrated by the market) to make way for an accumulation phase.
This stage of accumulation would be a time of potential purchase and would be characterized by a decrease in volatility, which shows that interest in the retail market is decreasing, buyers are accumulating the cryptoactive again and that whales are also following this trend. The predominant feeling in this period would be that of hope. Likewise, the study reveals that the hodlers are reaching a phase of equilibrium, with estimated losses of USD 3 billion.
The current bear market has presented parallels with the bear market of 2014-2015, so it would be possible the advent of a bull market if the price of bitcoin exceeds USD 6,500, since it presents a favorable risk-reward ratio.
The long-term risk-reward relationship for Bitcoin is currently the most favorable of any liquid investment in the world. We expect trading in a range of USD 3,000 to USD 6,500 after which we anticipate the emergence of a new bull market. Tuur Demeester and Michiel Lescrauwaet, Co-founders, Adamant Capital
The researchers believe that, although the price of bitcoin can reach lower levels, the fundamentals of this technology are gaining momentum, so that its ecosystem is growing rapidly, being “embraced” by millennials. The cryptocurrency would be recognized both as a decentralized technology and as an uncorrelated and highly liquid financial asset for institutions worldwide.
According to the authors, 10 years of development in the Bitcoin infrastructure have set the stage for mass adoption to occur over the next five years. During a phase that has been called “Windows moment”, Bitcoin will be recognized as a hedging instrument and as a reserve asset, so that important advances will be made in the network.
The expectations of these researchers are sown by a historical analysis of the bitcoin price, since a report presented by this firm in 2013 would have indicated that the boom and bust cycle is part of its usual adoption process. “When a very limited fungible asset faces increasing demand over the years, its price will increase in repeated phases of accumulation and redistribution,” they said. Like Demeester and Lescrauwaet, there are many traders who consider that a bull market is possible in the long term.
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