China’s FUD Became a Buying Opportunity for Institutional Investors

The whales of the crypto market yet again took the dip in the crypto market caused by China’s ban on cryptocurrency transactions as a buying opportunity.  Institutional investors bought from China’s latest FUD. 

China’s Bans Work as a Catalyst for Surge in Crypto Prices

China’s ban on cryptocurrency is not a new piece of information. They have been putting on bans again and again for a very long time. 

Every time China bans a segment of cryptocurrency in their country, the crypto market gets hit (there’s no doubt regarding that). The market rates of Bitcoin and other crypto coins fall by a major margin. 

However, this FUD [stands for Fear, Uncertainty, and Doubt] created by China’s regulators act as a golden opportunity for institutional investors to invest their monetary assets and buy crypto assets. 

As per Cointelegraph, “Institutional investors were buying the dip on the back of China’s latest FUD, with digital asset investment products generating $95 million worth of inflows last week.”

As per a report “Digital Asset Fund Flows Weekly” Released by CoinShares on September 27, the surge in dip buying caused an inflow of institutional crypto investment products for the sixth consecutive week. 

The dip-buying from September 20 to 24 resulted in an inflow of $95 million worth of investment. The weekly inflow accounts for 126% of the increase. 

In this particular period of investment, Bitcoin and Ethereum investments were the most in terms of quantity and value. The former crypto coin accounted for an inflow of $50.2 million and the latter, $28.9 million. 

Besides, various other altcoins witnessed an increase in inflows. Solana, Cardano, and Polka DOT accounted for $3.9 million, $2.6 million, and $2.4 million respectively. 

Despite the continuous outflow of Bitcoin, investors possessed an optimistic sentiment towards the flagship cryptocurrency. This has been recorded in terms of the major inflows in September. Bitcoin has seen a “234% increase in week-over-week.”

China’s Great Wall of FUD is a Bliss for Institutional Investors

according to CoinShares’ James Butterfill, “The continued inflows suggest the recent headwinds for digital assets, such as the widened China ban, were seen as buying opportunities for investors.”

The People’s Bank of China along with the autocratic regulators had declared on September 3 another cryptocurrency ban. In this, all cryptocurrency transactions were deemed “illegal” in the country. All financial and payment service bodies were restricted from indulging in any sort of cryptocurrency-related activity. 

China’s actions to crackdown cryptocurrency only restrict the Chinese citizens as Bitcoin rates face bullish runs after the dips caused by the FUD, Source: Bloomberg

Until last week, the western mainstream media platforms picked up this news. This was also a result of the FUD caused post this announcement of the ban. A major buoyant formed in the crypto market, the rates fell by 8% to 11%.

Bitcoin price surged up.

FUD from the regulators has always affected the crypto market. However, the low market creates an opportunity for buyers to invest in digital assets at lower rates to earn greater profits. The dip acts as a catalyst for bull runs in the subsequent months following these crackdown announcements. 

One legitimate example to justify this is the incident of 2017. China’s authoritative government banned crypto exchange platforms and consumers from dealing in ICOs. The ban resulted in Bitcoins’ rates fall to a low of approximately $4000. After this, Bitcoins’ price faced a historic bullish run and reached approximately around $20, 000. Crypto enthusiastic communities are seen to find an opportunity even in the red days or regulators’ attempt to crackdown the progressive digital finance system.