Bitcoin is holding steady around $19,000 amid growing signs of institutional adoption
A visual representation of the cryptocurrency Bitcoin on December 12, 2017 in London, England.
Jordan Mansfield | Getty Images
Bitcoin on Tuesday hovered at the $19,000 level, where it has remained for about a month with some momentary breaks.
The biggest cryptocurrency by market capitalization, whose volatility has been uncharacteristically low in recent weeks, was down 1.1% at $19,002.70, according to Coin Metrics. Ether fell 2% to $1,282.17.
Crypto prices remain depressed, with bitcoin off its all-time high from nearly a year ago by more than 70%. Chart analysts have been looking for the cryptocurrency to break down — to test its June lows of around $17,000 and find a new bottom, potentially as low as $10,000 — if it fails to hold $19,000. However, small breaches below that level have not been shown to be meaningful.
“Crypto markets continue their lull with little progress anyway,” said Richard Usher, head of OTC trading at BCB Group. “Until broad risk bounces, this sector will not.”
Traders are keeping an eye on economic data later this week. Although recent bitcoin volatility is low compared to stocks, the correlation between the two remains high.
“The price of bitcoin maintains the $19,000 level, but with the FOMC minutes and CPI ahead this week, the market is likely to refrain from taking risks, which in turn is likely to put pressure on bitcoin,” Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank, told CNBC Tuesday.
Prices held steady even after two major announcements that signaled that institutional acceptance and adoption of crypto continues to build despite the bear market. On Tuesday, Google announced that it would explore using Coinbase’s service for storing and trading cryptocurrencies. On top of that, BNY Mellon said on Tuesday that it will add cryptocurrencies to the various assets it holds as a custodian.
“These large companies believe in the potential of digital assets and Web3,” said Owen Lau, an analyst at Oppenheimer. “It takes time to build, but these companies have a long-term view of building their capabilities to ensure they won’t be behind in 3-5 years.”
In the past month, Nasdaq also launched crypto custody for institutions, and Franklin Templeton, Betterment, Société Générale and other asset managers have forayed into crypto.
A year ago, such news might have moved the crypto market, but prices are largely macro-driven now.
Nevertheless, prices are likely to remain stable for some time. The Federal Reserve pushed crypto into the hole with its interest rate hike plan, and investors say it is the central bank that will pull it back out.
