Short-term social media data suggests that Traders aren’t calling to buy during the bitcoin (BTC) crash at the moment… but the long-term picture is much brighter; separate research shows that 77% of Family Offices or family offices in the US are interested in or have invested in cryptocurrencies.
BTFD data was collected from posts mentioning “buy during the fall” on social media platforms like Twitter, Reddit, Discord and Telegram by KJ Lanaul and were posted on the Insights Santiment blog earlier this week. It also tells a positive story, indirectly.
Research indicated that in the last year, many traders have called to buy the dip too early in a downtrend, and the price often falls much further afterwards and does not recover for months.
“Often the crowd unanimously calls the dip/bottom before the actual dip and true bottoms form when the crowd least expects it, which is represented by low or no mentions of buying during the dip. Right now the mentions are very low.”
For example, In mid-May of last year, after the BTC price began to drop in response to China’s Bitcoin mining ban and Elon Musk-related FUD, roughly 68,000 online traders mentioned buying during the drop when BTC fell to around $44,000. However, the bottom did not materialize until the end of July, when BTC hit roughly $29,000.
“The pattern we have recognized is a wave of 3 buy mentions on the downside during the downtrend, each lower than the last, and after 3 waves the bottom occurs before the market recovers”Lanaul wrote.
Cryptocurrencies for the family
Although prices fluctuate in the short term, the long-term growth of crypto seems inevitable as more high-net-worth individuals and families back the sector. According to the latest edition of the BNY Mellon Global Family Office survey, 77% of family offices are active in the cryptocurrency sector or are considering investing in it in the near future.
Family offices are private companies that manage investments on behalf of high net worth individuals or families. BNY Mellon is an investment banking giant that also services the family office market.
The survey surveyed 200 participants, including 144 multi-family offices and 56 single-family offices managing assets worth more than $150 million each..
Of the large cohort that was interested in or active in crypto, 72% stated their intention to increase their crypto exposure in the next 12-24 months. In particular, the survey also found that 64% of multi-family offices were actively investing in crypto, compared to 36% of single-family offices.
Regarding the methods of exposure to cryptocurrencies, 58% of respondents stated that they preferred exchange-traded funds (ETFs), while 42% indicated a preference for direct ownership and custody.
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