Fun

Soaring Sell Orders Contrast Sharply with Bitcoin’s Renewed Bull Run

News Feed - 2021-02-02 01:02:07

Soaring Sell Orders Contrast Sharply with Bitcoin’s Renewed Bull Run


Alongside the cryptocurrency’s meteoric climb over the back half of 2020 and early 2021, a curious phenomenon has unfolded; heightened profit-taking and conversion to fiat currencies. Data collected by Simplex, a fiat-crypto gateway, underscores this seemingly paradoxical development. A Curious Race to Convert Crypto to Fiat Has Accompanied Bitcoin’s Latest Drive Higher


Sharing exclusive data with Bitcoin.com, Simplexcofounder and chief analytics officer Netanel Kabala says: While the international press coverage of Bitcoin’s rally has caused a swathe of new users to flock to the industry and buy-in, outflows have been equally significant. Of the total amount of cryptocurrency sold in the last six months, 43% was off ramped in December alone.


A quick look at Google Trends for the term ‘Bitcoin’ echoes these developments, especially now that new equity instruments like Grayscale Bitcoin Trustand big-name funds like Blackrock are adding exposure and raising crypto awareness.


Still, given the increased ability to quickly convert crypto and withdraw in fiat currencies, the uptick in funds leaving the ecosystem is astonishing. Part of this can be attributed to the growing fungibility of cryptocurrency, primarily helped by the support of players like Simplex, which empowers users to buy, sell, and spend crypto through Visa partnerships.


Although some of the latest rally’s onlookers have decried the rapid rise in crypto valuations as proof that a bubble is forming in this nascent asset class, others within the industry see the development as a harbinger of times to come. One of the areas this is most apparent is altcoins.


Data compiled by Simplex illustrates that as Bitcoin prices have leveled off above $30,000, daily purchases of altcoins have risen by approximately 65%. More interestingly, the data highlights that newer users account for nearly 20% of this volume, marking a sharp increase in the number of novice retail investors expanding and diversifying their exposure within the ecosystem.


Poloniex, one of the top 20 global cryptocurrency exchanges, which has adopted Simplex’s platform, has experienced these results firsthand. Karen McHenry, Poloniex’s Director of Product, attributes this development to greater access within the ecosystem, especially with Simplex’s buy option, which promotes instant account funding alongside the heightened ability to cash out quickly.


She also doesn’t see the ability to more quickly convert from crypto to fiat as harming interest despite the eyepopping amounts taken off exchanges. It may sound surprising, but adding the ‘sell’ option actually has a positive impact on the number of crypto transactions too.


Though this easy offramp and soaring volume of sell orders might seem negative for prices, it can also be viewed as a healthy reflection of the ecosystem’s growing use cases. Besides making it easier to exit and enter, growing areas like decentralized finance (defi) and greater fungibility all contribute to a cryptocurrency’s value proposition.


As institutions begin lining up to add exposure as retail accumulation climbs, Bitcoin momentum may actually accelerate, and by extension, lift the altcoins sought after by the newcomers seeking opportunities outside the seminal crypto coin.


McHenry adds: If the bull market can maintain its momentum, some of these BTC profits will flow into altcoins, which are particularly popular among retail investors. This creates a positive feedback loop, with traders who turn a profit prone to telling their friends about crypto, which brings more investment into the space.


Do you think the offramping will continue throughout 2021? Let us know in the comments sections below. US Federal Reserve Seeking Manager to Research CBDCs and Stablecoins NEWS | 7 hours ago Rockstar and Kiss Bassist Gene Simmons Tells Fans He Bought Bitcoin and Other Cryptocurrencies NEWS | 14 hours ago Tags in this story altcoin, Bitcoin, crypto to fiat, Cryptocurrencies, Exchanges, fiat currencies, offramping


Image Credits: Shutterstock, Pixabay, Wiki Commons Spot-markets for Bitcoin, Bitcoin Cash, Ripple, Litecoin and more. Start your trading here. Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments

News Feed

Bitcoin Mining Firm Cleanspark Purchases 10,000 Bitmain Miners for $28 Million
Bitcoin Mining Firm Cleanspark Purchases 10,000 Bitmain Miners for $28 Million The bitcoin mining company Cleanspark revealed on Wednesday that the company has signed a purchase ag
David Attlee1 hour agoAnt Group launches new blockchain brand for Web3 developersThe new entity, ZAN, will help the parent company shake off its affiliations with Web3 and proceed to the IPO.351 Total views5 Total shares
An Ethereum VR Game Featuring Atari and Care Bears Sells Plots of Virtual Land for $76K
An Ethereum VR Game Featuring Atari and Care Bears Sells Plots of Virtual Land for $76K A great number of Non-fungible tokens (NFTs) have been selling on various
Ethereum Whales Control 43% Of Supply – What This Means For Retail Traders
Este artículo también está disponible en español. Large holders of Ethereum, also called Ethereum whales, have been on an accumulation trendfor a while now, with on-chain
Yashu Gola13 hours agoCan XRP price hit $1? Watch these levels nextXRP price almost doubled after Ripple’s legal win against the U.S. SEC. But can its rally continue after nearly reaching $1?28568 Total views14 Total s
General Bytes ATM Developers Add Two-Way Support for Bitcoin Cash-Based SLP Tokens
General Bytes ATM Developers Add Two-Way Support for Bitcoin Cash-Based SLP Tokens The Simple Ledger Protocol (SLP) has been extremely popular among Bitcoin Cash (BCH) advocates and
Invictus NFT Lab Blazes Trail for a New Fine Art Paradigm
Invictus NFT Lab Blazes Trail for a New Fine Art Paradigm sponsored In our view, blockchain technology and non-fungible tokens (NFTs) present a perfect tool to revolutionize the tra
Bitcoin’s Dominance Could Kill Altseason Dreams, Analyst Warns
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Bitcoin Clears $65,000: Can The Bulls Push BTC To Historic Heights?
Este artículo también está disponible en español. Bitcoin (BTC) has made a bold move, breaking past the crucial $65,000 level and sparking renewed hope of reaching its al
DWF Labs launches $20M fund for Web3 projects in China
Josh O"Sullivan7 hours agoDWF Labs launches $20M fund for Web3 projects in ChinaThe Cloudbreak Fund will invest in gaming finance, social finance, memecoins, derivatives, and layer-1/layer-2 projects across Chinese-speak
Telegram Mini Apps are ‘Trojan horse’ for mass blockchain adoption — TON investments director
Zoltan Vardai10 hours agoTelegram Mini Apps are ‘Trojan horse’ for mass blockchain adoption — TON investments directorOnboarding the next 500 million users will require simple apps with “actual usability,” Just
New York AG reaches $2B settlement with Genesis ‘for defrauded victims’
Turner Wright8 hours agoNew York AG reaches $2B settlement with Genesis ‘for defrauded victims’The attorney general’s office filed a lawsuit against Genesis in October 2023 for allegedly defrauding investors throug