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Bitcoin maximalists are still trying to understand the reasons for the recent collapse, as a result of which the main cryptocurrency has lost more than half of its value per day.
Some analysts said that the culprits were mainly the institutions that were panicked because of the coronavirus. For example, well-known bitcoin fan Jimmy Song said:
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“Today has shown that there is a flip side to the coin when institutions acquire bitcoins.”
Today proves that institutions buying Bitcoin has a flip side.
- Jimmy Song (송재준) (@jimmysong) March 13, 2020
However, it could also be panic sales, similar to gold sales in 2009, when people struggled with the global financial crisis.
Galaxy Digital CEO Mike Novogratz responded to Song's words:
“It's not about the institutions. It was a collapse due to the use of borrowed funds. Institutions do not respond so quickly to make such a sale. It was a panic sale by those involved in margin trading. ”
That wasn’t institutions. That was a leveraged washout. Institutions aren’t fast enough to sell like that. That wa panic selling from people who bought on margin.
- Michael Novogratz (@novogratz) March 13, 2020
The collapse of Bitcoin caused a lot of discussion about its security. For example, BlockTower Capital managing partner Ari Paul also expressed his opinion about this:
“During a panic, everything is sold, except money, because people need something that allows them to buy food and pay for an apartment. Fear causes a fall in everything but money. ”
Ari Paul also added that Bitcoin succeeds precisely when “people are afraid of cash,” or rather, their depreciation.
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