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Bitcoin (BTC) It bottomed out in December, falling below $92,000, and many cryptocurrency enthusiasts are trying to figure out why. Chris BurniskeA former crypto leader at ARK Invest and current partner at Placeholder VC, shares his thoughts as he looks at the bigger picture, not just the world of cryptocurrencies.
In Burnieski's view, the year-end decline in Bitcoin has less to do with investors losing interest and more to do with seasonal financial patterns now impacting the cryptocurrency market. With the long-awaited launch of multiplayer Bitcoin And Ethereum ETFs In 2024, cryptocurrencies have become closely linked to traditional finance.
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This correlation amplifies the effects of year-end activities such as portfolio rebalancing and account reconciliation.
It is interesting to see that while BTC is struggling, other crypto assets like ETH and Sol They retain their strength or even gain strength, Burniske notes. This flies in the face of the idea that the market is completely risk-averse and suggests that it is more about the usual financial frugality at the end of the year.
Trading strategies and algorithms, which are often influenced by institutions, appear to have changed to adapt to these seasonal trends.
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The holiday season is usually a slow time for trading, so it will be interesting to see how it affects cryptocurrencies. It's been a big year for the digital asset market, with new ETFs launching and more people getting involved.
However, cryptocurrencies are now officially part of the stock market, whether we like it or not. This means that correlation to major assets, or at least to their major behavioral patterns, is here to stay, and is something one cannot avoid.
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