Yoni Assia, the CEO of major multi-asset trading platform eToro, has said that the correction of Bitcoin is positive for the long-term health and growth of the crypto market.
Throughout August, Bitcoin recorded its third major correction in 2018, as its price fell from $8,500 to $5,850. But, shortly after dipping below the important $6,000 support level, the dominant cryptocurrency recovered relatively quickly to mid-$6,000.
Demand For Bitcoin Has Not Declined
In an exclusive interview with NewsBTC, Assia, who oversees one of the biggest online trading platforms in the global finance sector with more than 8 million users, said that market correction was necessary in order for the crypto market and industry to mature, establishing a foundation for future rallies.
He emphasized that the demand for Bitcoin and cryptocurrencies as an emerging asset class has not declined even after the 78 percent correction in the valuation of the crypto market. Assia said:
“In our view, the recent market correction is good for the long-term development of the market. Cryptoassets are still a relatively nascent market; emerging technologies like this often see swings in their value in the early days. Market adjustments like those we have experienced recently help to stabilize prices, and make the industry more robust. Despite these adjustments, however, we have not seen a significant dip in demand for digital assets.”
Crucially, Assia added that based on market data eToro obtained, the demand for Bitcoin will not slow down in the near future, as the crypto market continues to grow at exponential pace.
“As the market matures, more investors are expanding their portfolios to include cryptos, while new investors are opening portfolios to trade crypto assets. We do not expect this demand to slow down any time soon, as more people recognize the potential of crypto assets,” Assia stated.
Massive Improvements in Market Structure
The steep drop in the price of Bitcoin and other major digital assets such as Ethereum, Bitcoin Cash, and Ripple this month was unexpected by the vast majority of investors, particularly because of the emergence of significantly positive developments in the global cryptocurrency sector.
In August, the New York Stock Exchange, Microsoft, and Starbucks formed an initiative called BAAKT to improve the usability and adoption of cryptocurrencies, the Japanese and South Korean governments disclosed their intent to strictly regulate cryptocurrency exchanges as regulated financial institutions, and the government of China has spent over $3 billion to finance blockchain startups.
Yet, despite the inflows of positive news and events, the cryptocurrency market has shown a strong downtrend with lack of momentum.
Some investors have speculated that the over-the-counter (OTC) market, which is said to be two to three times larger than the public cryptocurrency exchange market, caused the market to drop.
Regardless, Assia explained that once regions with opaque policies regarding cryptocurrencies such as India clarify their stance on digital currencies as an asset class, the sector will see more positive and optimistic developments, inevitably pushing the price of major digital assets upwards.
“The potential of blockchain technology is becoming increasingly clear to governments and financial institutions worldwide, as we have seen in recent attempts to incorporate this technology into their existing structures. We also know that institutional investors are waiting for regulatory clarity to move from the side-lines to the centre of the playing field. As we see developments move forward in these areas, we expect the price of Bitcoin and other cryptoassets to climb higher, though we may see some volatility as investors respond to short-term market news,” Assia told NewsBTC.