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 selling 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 200 days of market expansion. A number can’t go up forever. That doesn’t happen in any market,” Demirors said 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, the chief strategy officer at digital asset investment firm CoinShares, pointed to transactional activity on the Bitcoin blockchain to back up their point of view.
“There are many 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 drop below the all-important $ 30,000 support level before returning to positive territory in the afternoon. Analysts had been watching the $ 30,000 level after the cryptocurrency experienced a series of losses in May.
Earlier Tuesday morning, Wall Street strategist Tom Lee had 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 that he believes a lot of recent sales have come from retailers who got into bitcoin earlier this year, when the cryptocurrency rose 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. ”