How do these financiers manage to retain their optimistic outlook regarding the progress of the digital currency sector after 85% valuation drop all over the board? Predominantly, renowned individual financiers can manage big losses in nascent asset classes and high-risk assets, such as digital currencies like BTC and ETH due to the fact that they equate to just a small bit of their wealth and portfolios.
Just like with real estate and the rest of conventional marketplaces, wealthy financiers are able to hold onto assets and properties even when an unpredicted market crash takes place or bears overtake the market.
However, common retail financiers and individual traders seeking for quick cash to handle day-to-day operations and costs do not have anything else to do rather than sell the majority of high-risk assets in their possessions.
In bearish market, retail traders tend to experience substantial losses due to the fact of their inability to withstand an 80-90% price drop and are forced to make a liquidation of their assets. Billionaire financiers and major institutions, on the contrary, have the chance to hold and sustain their portfolios.
Probably a more significant reason allowing the high net worth financiers to stay optimistic on the long-term progress of the cryptomarket is Bitcoin and the history of its performance through the past decade.
BTC has been known for encountering five bubble-crash-build-rally circles so far, dropping by approximately 85 percent and performing a recovery to a record all-time peak. Bitcoin has lost nearly 82% of its price at 19,500 USD and the 85% point would account for nearly 2,950 USD.
Most of the renowned financiers on Wall Street are presently participating in the fate of the cryptomarket, having dealt with numerous cycles similar to Bitcoin’s patter, and for a fair share of those financiers these cycles do not come as a big surprise.
2018 has also displayed to financiers that digital currencies are an asset class are not a fad, as both digital currency-related companies and large financial institutions keep developing and solidifying the infrastructure of this nascent asset class, as evident from the efforts made by NYSE, Nasdaq, and ICE.