Long-time crypto bull Meltem Demirors reiterated her confidence in the cryptocurrency on Tuesday, telling CNBC that she believes the correction in Bitcoin is simply wiping out investors with “paper hands”.
Paper hands is a term used in the crypto community to characterize people who sell a digital asset like Bitcoin when the markets are hit by turbulence. It is the opposite of so-called diamond hands or ardent believers who say they will last for the long term.
“We had market expansion for 200 days. A number cannot go up forever. That doesn’t happen in any market, ”said Demirors on“ The Exchange ”. “What we see is a correction, a contraction, and much of what is shaken out is what we call the ‘paper hands’, the ‘weak hands’.”
Demirors, chief strategy officer at a digital asset investment firm CoinShares, pointed to transaction activity on the Bitcoin blockchain to back up their point of view.
“There are a lot of retailers who stepped in, didn’t do their research and are now selling. There aren’t many long-term owners out there selling, ”she said. “If we look at activity in the chain, wallets that have been held for a long time have actually taken advantage of this opportunity to amass.”
Demirors’ remarks on CNBC follow a wild ride for Bitcoin on Tuesday, which began with a sharp decline below the key support level of $ 30,000 before bouncing back into positive territory in the afternoon. Analysts had been watching the $ 30,000 level after the cryptocurrency suffered a series of losses in May.
Earlier on Tuesday morning, Wall Street strategist Tom Lee told CNBC that the world’s largest cryptocurrency by market value has a rough technical picture in front of it in the near future, but he still believes Bitcoin will be worth $ 100,000 each by market value by the end of 2021 Token.
Like Demirors, Lee said he believes much of recent sales came from retailers who got into bitcoin earlier this year, when the cryptocurrency migrated to its all-time high near $ 65,000 in April.
“I think we will continue to see consolidation here,” said Demirors. “There is a lot of macro uncertainty. Obviously there is a lot of uncertainty about politics. There are also a lot of negative headlines.”
China has recently stepped up its crackdown on cryptocurrencies.
“I think part of that is just the cycle we go through every few years with crypto, but we’re seeing a lot of new inflows. We are seeing a lot of activity, especially on the market side, ”said Demirors.
While Demirors said, “Bitcoin has always been volatile,” she explained that during the steep pullback in May, “there was a lot of leverage across the board. Now we’re done deleveraging. Now we’re seeing a lot of” cash selling. ”