[Coin Report] Bitcoin is falling… Opinions are divided: “A bigger drop is coming” vs. “A chance to buy at the bottom”

Bit has fallen sharply this week, breaking the $80,000 level for the first time in 3 months. As of 5:13 pm on the 28th, based on CoinMarketCap, the price of BTC is trading at $78,656, down 20% from the previous week. This is a 28% drop from the all-time high of $109,114 set just before the inauguration of former US President Donald Trump last month.

Along with the plunge in BTC, major altcoins such as ETH also recorded a decline of over 20%. As the overall cryptocurrency market has turned bearish, investment sentiment has also frozen. The Alternative.me Crypto Fear & Greed Index fell to 16 points, indicating 'extreme fear'.

This sharp drop in BTC is analyzed to have originated from the moves of hedge funds that were buying BTC spot ETFs. Prominent BTC investor Kyle Sasse explained that "hedge funds that had taken short positions in futures while buying spot ETFs have recently been forced to unwind their positions due to the market downturn, leading to a large-scale withdrawal of funds from the cryptocurrency market."

As these investors liquidated their positions of buying BTC spot ETFs and selling futures, it led to the selling of BTC spot ETFs, which in turn led to the selling pressure on the BTC spot market. Indeed, there has been a sharp outflow from BTC spot ETFs recently. On the 27th (local time), a net outflow of $266.31 million (about 388.9 billion won) was recorded in US BTC spot ETFs. The day before, BlackRock's IBIT had the largest net outflow of $420 million (about 613.2 billion won) on record.

Experts' views on the future BTC price outlook are divided. Arthur Hayes, co-founder of BitMEX, a prominent figure in the industry, raised the possibility of further BTC declines. Through his X account, Hayes predicted that "BTC is in a downtrend and is lowering its bottom" and that "based on the current price movement, it is likely to see another sharp drop below $80,000 over the weekend and then trade sideways for a while." He had previously mentioned that BTC could plunge to $70,000.

On the other hand, there are also views anticipating an early rebound in BTC. Matt Hogan, Chief Investment Officer of crypto asset management firm Bitwise, evaluated the current situation as "the best time in history to buy BTC." This perspective sees the recent sharp drop as an opportunity to buy BTC at the bottom. Mentions of "BTC bottom buying" have also surged on major SNS like X, Reddit, and Telegram. According to on-chain analysis platform Sentiment, mentions of BTC bottom buying reached their highest level since July last year.

Michael Saylor, founder of MicroStrategy, which is known to hold the most BTC among all publicly traded companies, also expressed his continued faith in BTC. Saylor said on X that day, "BTC must be protected, even if it means selling a kidney." MicroStrategy's unrealized BTC gains have fallen by nearly a third in the past two months. Currently, MicroStrategy holds 499,096 BTCs, with unrealized gains of $6.74 billion. In December last year, the unrealized gains were around $20 billion.

Reporter Kim Jung-woo

woo@decenter.kr