Crypto bull Meltem Demirors said Wednesday that she believes the recent turmoil in Bitcoin and ether are long-term positive developments, claiming the bullish story on digital assets has remained intact.
“It was really frothy. There was a lot of leverage in the markets. Some of that was taken out in April,” CoinShares’ chief strategy officer told CNBC’s Fast Money. She added, however, that “there was still a lot of leverage, so this correction we’ve seen is healthy. Pullback is normal in crypto.”
The Demirors’ remarks follow a particularly volatile section of trading in Bitcoin, the world’s largest cryptocurrency by market value.
At the bottom of the day, Bitcoin fell more than 30% from the session to $ 30,001.51, according to Coin Metrics. This is its lowest level since late January, and Bitcoin is well over 50% down from its all-time high of over $ 64,000 in mid-April.
Bitcoin made up some of those losses on Wednesday, trading above $ 39,500 in New York as of 6:15 p.m. Even so, it’s down more than 8% in the past 24 hours.
Ether, the second largest cryptocurrency by market value, has also fallen sharply in the past few days after hitting an all-time high above $ 4,300 last week. It was down 22% last day as it traded around $ 2,600 per token on Wednesday. Ether, which runs on the Ethereum blockchain, started the year priced below $ 800 each.
Demirors said she believes investors in various asset classes are broadly looking to reduce risk, which is playing a prominent role in the crypto slump. She said her firm, which has approximately $ 5 billion in assets under management, has seen a downward trend in options activity over the past two weeks.
“I think right now we are generally seeing a skittishness around risk so allocators are pulling back. We have seen this reflected in the cash flows over the past week,” added Demirors, who previously told CNBC, she got into Bitcoin when it was around $ 150 a piece.
“We saw $ 50 million net outflows of bitcoin fund products last week. I think that’s skittishness. It’s macro-related. It’s related to overall markets and tax day sales. People just will afraid, and that’s exactly what we have here. ” “she claimed.
Another factor that appears to have been impacting crypto markets lately is comments from Elon Musk, CEO of Tesla, whose electric vehicle maker owns Bitcoin. Hundreds of billions of dollars were ousted from the crypto market following its announcement last week that Tesla would no longer accept Bitcoin as a form of payment.
Musk sent out a tweet on Wednesday implying that Tesla would not sell its bitcoin holdings.
Institutional investors recently switched from bitcoin to gold, according to a new release from JPMorgan. The company’s research is noteworthy as the adoption of Bitcoin by institutional investors has been cited as one of the reasons for the rally that began last year.
Demirors isn’t the only longtime Bitcoin believer remaining confident in the face of recent sales. Bill Miller, the famous value investor and bitcoin bull, told CNBC earlier Wednesday that the recent decline in bitcoin was “pretty routine.”