- Bitcoin (BTC) price consolidates around $16,700 raising hope that the bottom is in.
- According to several analysts, the FTX collapse contagion will not keep BTC down for long.
Over the past few days, the Bitcoin (BTC) market has found some stability around the price of $16,700 fueling optimism among analysts that the bottom is in and the worst of the FTX contagion is over.
Jan Wüstenfeld, an independent Bitcoin market analyst, wrote that the FTX collapse is even likely to have a long-term positive effect on the price of BTC. One reason for his belief is the revelation that FTX did not have any actual Bitcoins that it will have to liquidate as it was operating a fractional reserve based on paper Bitcoins.
Take your #Bitcoin off of exchanges!
For your own good, and so that they can't issue fake paper Bitcoin anymore.
That way, Bitcoin can get back to true price discovery. https://t.co/dqKF8nDWmn pic.twitter.com/TX1NebUPjg
— Jan Wüstenfeld (@JanWues) November 16, 2022
Other analysts have also pointed out that FTX and Sam Bankman-Fried bowing out from the market is a net positive as the exchange CEO had anti-Bitcoin tendencies. The market is now putting articles of SBF criticizing Bitcoin in a better perspective and pointing out his links to politicians that have been working against the crypto industry.
According to Bitcoin bull Nayib Bukele, the president of El Salvador, FTX was exactly the opposite of Bitcoin as the cryptocurrency was created to prevent Ponzi schemes. Bukele said in a tweet;
FTX is the opposite of Bitcoin. Bitcoin’s protocol was created precisely to prevent Ponzi schemes, bank runs, Enron’s, WorldCom’s, Bernie Madoff’s, Sam Bankman-Fried’s, bailouts, and wealth reassignments. Some understand it, some not yet. We’re still early,
Strong bullish sentiment for BTC returning to the market
The shared sentiment by Bukele and Wüstenfeld is the basis on which several other market analysts are also noting strong bullishness for BTC and expecting the price to return to $21,000 and higher. This is especially as this is not the first time that centralized entities have caused a market collapse since BTC has recovered.
Aside from FTX, the market has passed through the collapse of entities like Terra and Celsius Network. And each time, the market flush of the questionable altcoins has only made a stronger case for BTC adoption.
FTX collapse makes this bear market shorter not longer.
— Murad (@MustStopMurad) November 17, 2022
According to on-chain data, BTC is already seeing increased demand and a shift in the relationship investors have with centralized exchanges. Data from on-chain monitoring resource Coinglass shows exchanges seeing heavy BTC balance reductions.
Similarly, BTC institutional funds have also been seeing inflows in recent weeks. According to Coinshares’ report that noted weekly inflows to institutional funds totaling $42 million, investors are seeing the FTX collapse as an opportunity.
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“The inflows began later in the week on the back of extreme price weakness prompted by the FTX/Alameda collapse,” wrote James Butterfill, head of research at CoinShares.
Related: BREAKING: SBF says FTX has $9B liquid assets and wants to restart – Fake news or real?
