Bitcoin drawdown and important bullish news

By 22/01/2021News
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The price of the first cryptocurrency has already fallen by $11,000 from its previous all-time high. While analysts are trying to predict the depth of the correction, news of great fundamental importance for BTC has come out.



The world’s largest investment company, BlackRock, has requested permission from the US financial regulator for cryptocurrency transactions. For now, the company does not plan to buy Bitcoins directly, sending them to its own or a third-party storage facility. Permission is required to trade Bitcoin futures.
In theory, of course, BlackRock could not only buy these futures, but also sell them. In reality, however, there would be no selling, as the fund simply has not prescribed in its rules the opening of short positions without coverage.
This news cannot be instantly recouped by the markets. However, it is extremely important for 2 reasons.
1. BlackRock has about $8 trillion in assets under management. If the company wanted to invest 1% of the money under management, that amount would be about 25% higher than the entire bitcoin capitalisation at the moment. If anyone thinks that the BTC market will grow in this case by a factor of 2 and 25%, that is not the case. The fact is that there is at most 5 million BTC on the market (out of 18.5 million ) that can be bought. And even if no one joins the purchases (which is impossible during a trend), the price of BTC will rise 5-10 times.

2. The second conclusion is as follows. Large investment funds and pension funds are very similar. They depend on the opinion of their investors. If the largest investment fund starts buying BTC, it means that smaller funds simply can’t stay away because investors won’t understand them. They will withdraw the money, handing it over to managers who feel the hand of the market. This is exactly what we covered in detail at the end of last year.

Perhaps at these levels, bitcoin provides one of the last opportunities to buy into a correction before storming the new $50,000 milestone.

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