As of the time of publication, Bitcoin has hovered around $28,000 per coin after briefly falling to as low as $25,402.04 per coin in the last 24 hours.
IDX Digital Asset CIO Ben McMillan told FOX Business’ “Mornings with Maria” on Thursday that Bitcoin’s nosedive shows that the “low correlation thesis” between risky assets and the financial markets is “gone”.
“Bitcoin is traded with a high correlation during down markets. So it’s exactly when you would hope that it would come to save your portfolio is exactly when its actually injecting risk into the portfolio. So I think the low correlation thesis is gone,” he explained. “Now do I expect it to stay this highly correlated to risk assets indefinitely? No, but I think the positive correlation is here to stay absolutely.”
In addition to the crypto market dropping in sympathy with the financial markets, Bitcoin Foundation chairman Brock Pierce told FOX Business Digital that the implosion of Terra and the “de-pegging” of the UST below $1 “created a shockwave impacting the entire crypto market in a time of vulnerability.”
Despite the crypto market’s recent volatility, Pierce emphasized that he is “incredibly bullish” and continues to believe in “the promise of cryptocurrency’s ability to create a more fair and efficient world.”
“As the sage of Omaha, Warren Buffet, would advise, ‘buy low,’ or as Baron Rothschild would say ‘buy when there is blood in the streets’”, he added. “I always point out that this is a volatile market, with high highs and low lows, and in crypto speak, ‘buy the dip and hold on for dear life.”
Bitwise Asset Management CIO Matt Hougan told FOX Business’ Ashley Webster on Thursday that he expects the cryptocurrency market’s volatility to stick around over the next 3 to 6 months, but noted that it is an “interesting time” for long-term oriented investors to build a position.
“I think the long-term fundamentals are stronger than they’ve ever been,” he said.