Bitcoin (BTC) is recovering from a “Coinbase hangover,” as institutional investors see anything below $50,000 as a buying opportunity, says BitPay CCO Sonny Singh.
According to Singh, this demonstrates that the market has changed from three to four years ago. At that point, a “price drop from 10% to 15% could have easily become a 35% to 40% drop.” However, many institutional investors had recently entered at around $45,000 to $50,000.
So when it reached that level again, they started buying back up. Meanwhile, he said that many retail investors are now seeking out altcoins for better returns.
Altcoin season
Singh brought up a gathering he was at recently. Singh highlighted that “everyone was talking about, ‘Hey I’m buying this coin, I’m buying stellar (XLM) or I’m buying cardano (ADA), or I’m buying solana (SOL), or I’m buying whatever coin they want,’ and no one was buying bitcoin anymore.”
He said they felt bitcoin only had the potential to double in price over the next few years. Whereas with altcoins, they could increase five-fold or ten-fold within a year or even up to six months.
To this end, Singh said people believe that the “smart money or the easy money has already been made from bitcoin”. At this point, he said it was just institutions, who would get consistent, albeit smaller returns. But Singh noted, “it’s not for these young retail kids.” He specifically cited Robinhood traders, who expect at least four-fold returns in six months.
Rising crypto payments
Following the Coinbase listing, the BitPay CCO said that the catalyst for the next run would be further use cases. “I think everyone’s convinced now that trading is here to stay,” he said, “but what really can we do with this crypto?” First, Singh pointed out the increasing use of crypto for payments.
He brought up his own experience, mentioning BitPay’s recent partnership with WeWork. “My phone is now ringing off the hook every day of companies now wanting to accept crypto,” he stressed. He also mentioned Square Inc. and PayPal getting into the space.
However, he indicated that as crypto payments grow, the coins being used are changing. Whereas four years ago, roughly 95% of payments were done in bitcoin, Singh said, “last week, we had our lowest bitcoin volume ever with 50%.”
He emphasized that dogecoin (DOGE) was growing in prominence, making up 10% of their volume, last week. Singh also mentioned the increased usage of stablecoins as well.