Bitcoin experienced a mini-flash crash on Wednesday when its price fell from $ 59,400 to nearly $ 57,000 in just five minutes of trading.
Analysts blamed overfunded long positions for the downtrend, with the slump liquidating extended bullish contracts valued at around $ 600 million on major futures exchanges. After the wiping out, a short sustainability period followed as Bitcoin maintained a short-term floor price of around USD 58,000.
On the way to the US session, the flagship’s cryptocurrency fluctuated mainly between profit and loss. Goldman Sachs announced that it will soon be offering its first investment services in Bitcoin and other cryptocurrencies to its private wealth management group clients.
Anti-Inflation Narrative Picks Momentum
Mary Rich, global director of digital assets at Goldman’s private wealth management division, confirmed in an interview with CNBC that they would offer their clients a “full spectrum” of cryptocurrency investment services, “whether through physical bitcoin, derivatives or traditional investments happens to vehicles. “
The announcement followed a similar move by Morgan Stanley, who added three Bitcoin funds to its investment services list earlier this month to give its wealthy clients access to the burgeoning cryptocurrency industry, which has risen a thousand-fold in valuation during the coronavirus pandemic.
BREAKING: $ GS will start offering its private wealth management clients investments in #bitcoin and other digital assets from Q2, @hugh_son reports: pic.twitter.com/kgStpd9lFm
– Squawk Box (@SquawkCNBC) March 31, 2021
Investors flocked to Bitcoin and similar assets because they pledged to act as a hedge against inflation caused by central banks’ ultra-loose monetary policies and increasing government debt problems. Many, including Tesla, have equated Bitcoin with a store of value like the U.S. dollar, which has lost more than 13 percent of its value in the past year.
“There is a contingent of customers viewing this asset as a hedge against inflation, and the macroeconomic backdrop of the past year certainly helped,” said Ms. Rich. “There is also a large contingent of customers who feel they are in some way at the beginning of a new Internet and are looking for opportunities to participate in this area.”
What Bitcoin Analysts Think
Most of the calls that came after the Goldman Sachs story were bullish.
A pseudonymous investment analyst on Twitter noted that Bitcoin’s recent decline appeared as a pause before the cryptocurrency resumed its upward momentum.
“BTC saw a -26% retreat after declining from ~ $ 57,500 in February,” he noted. “Then BTC saw a -18% retreat after declining from ~ $ 61,000 in mid-March. “Important findings: BTC rises higher after each return. [and] If rejected at higher prices, it enjoys flatter traces. “
Bitcoin fell to $ 60,000 in the early New York session.