Bitcoin frenzy settles down as big players muscle into market

LONDON/NEW YORK/ SINGAPORE: After bouncing up, falling down and keeping investors on the edges of their seats, bitcoin may be maturing into a period of relatively boring stability, experts say.

A worldwide wave of regulation has led to a collapse in trading volumes. Cryptocurrency advertisements are disappearing from top internet pages, and bitcoin no longer dominates Google searches.

As investors try to figure out what bitcoin wants to be when it grows up, the best-known cryptocurrency is going through somewhat of an existential crisis.

“It needs a new narrative,” said Nicholas Colas, New York-based founder of investment research firm DataTrek. “There is every chance that if there is some sort of institutional involvement, there could be a move higher.”

Bitcoin rallied 25 per cent in April after crashing 70 per cent from a high near US$20,000 late last year.

The cryptocurrency landscape has indeed changed. Mom-andpop investors who drove bitcoin’s skyrocket rise in 2017 have been pushed aside by government

There is every chance that if there is some sort of institutional involvement, there could be a move higher. Nicholas Colas, DataTrek investment research

bans on trading, and replaced by cryptocurrency funds, wealthy individuals and established financial firms.

The bigger players can make bigger moves, but their trades are often obscured by screens on overthe-counter (OTC) brokerages and matching platforms.

They are also less likely to chase sudden swings in bitcoin’s value, being more interested in the potential of unproven but promising blockchain technology.

Average daily traded volumes across cryptocurrency exchanges fell to US$9.1 billion in March and to US$7.4 billion in the first half of April, compared with almost US$17 billion in December, according to data compiled by crypto analysis website CryptoCompare. — Reuters