This Week In Crypto is a weekly segment from the Live Coin Watch News team, providing readers with a fun, succinct, and pertinent summary of the most important Bitcoin-related events in the past week or two.

Bitcoin Sees Volatile Week, But Outlook Still Bullish

It’s been quite a volatile week for Bitcoin. The cryptocurrency rallied past $10,000 for the first time in many weeks, reaching as high as $10,400 in a strong surge that liquidated dozens of millions worth of short positions on BitMEX.

But just as fast as Bitcoin rallied, the asset tanked. Just a day and a bit after the leading cryptocurrency moved into the five digits for the first time in over a week, it plunged by $1,600 in three minutes on BitMEX, falling as low as $8,600 as longs capitulated.

Bitcoin price chart crypto
Bitcoin price chart from TradingView.com

Fortunately, analysts say that the outlook for Bitcoin remains bullish.

Bloomberg Bullish on Crypto

Bloomberg senior commodities strategist Mike McGlone released his latest monthly report on the cryptocurrency market this week. The analyst was bullish on Bitcoin, so bullish that he said that “something needs to go really wrong for BTC not to appreciate.”

The analyst’s bullish sentiment boiled down to a confluence of factors, which are as follows:

  • Bitcoin is outperforming the “Crypto Gaggle,” showing that it is on bull market footing. Altcoins may eventually follow suit.
  • The cryptocurrency continues to mature into “digital gold” as this has been a year of “unprecedented central-bank easing.” BTC is purportedly starting to trade with a positive correlation and with a market beta close to that of gold, further cementing the “digital gold” moniker.
  • Bitcoin’s price action is “mirroring” price action seen after 2016’s halving. BTC continuing to follow this historical trend will allow the asset to “approach the record high of about $20,000 this year.”
  • Volatility is decreasing due to rapidly increasing futures and options adoption, keeping prices “tilted toward appreciation.”

Crypto’s Killer Use Case, DeFi, May Be Plateauing: Investor Fears

According to Multicoin Capital managing partner Kyle Samani, decentralized finance based on Ethereum is  “facing some real challenges,” and thus may begin to stall in the short to medium term.

Samani explained in the post that at current, there are clear “latency” issues in the DeFi space limiting adoption:

“You just can’t build global scale trading systems for lots of users on POW chains. It just doesn’t work. High latency –> all kinds of negative second order effects. So I think for now we are near a plateau for DeFi – measured in ETH terms (not USD) – until the core latency problems are solved.”

Crypto Whales Are Accumulating Ethereum At a Rapid Clip

Prominent “whales” or notable investors in the cryptocurrency space have revealed that they are accumulating Ethereum, despite the asset trading more than 80% below its 2018 all-time high of $1,400.

On May 30, Garry Tan, a prominent venture capitalist that is purportedly the first investor in Coinbase, wrote that he has “started accumulating ETH again,” adding in subsequent comments that he is doing so for the “long term hold” rather than short-term trading due to taxes.

Similarly, Gemini co-founder Cameron Winklevoss recently said on his brother and his’ crypto-asset holdings:

“We definitely own a lot of ether. They’re large and it’s a material amount. Yeah, quite large […] A couple of years back we made a concerted effort to buy a lot of ether.”

The Winklevoss Twin added that their ETH investment is in the “same galaxy” as their ~$1 billion Bitcoin stash.

Institutions Are Accumulating Bitcoin at a Rapid Clip

Data shows that institutions are heavily accumulating Bitcoin.

Below is a chart that this writer compiled: it shows that over the past 12 weeks, Grayscale Investments alone has brought in over 62,973 BTC, responding to client demand for the leading cryptocurrency.

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