Troy Gayeski, US$7.5 billion hedge fund investment manager predicts a bitcoin supply shock is imminent. On-chain signals would indicate that there is more investment in Bitcoin again and that it will be held for a longer period of time.
On-chain signals point to this
Troy Gayeski, co-chief investment officer and senior portfolio manager at SkyBridge Capital, a hedge fund with $7.5 billion in assets under management, believes there is a bitcoin shortage that is not far off.
In the interview with Bloomberg, he expressed that the signals suggest that high amounts of bitcoin could be accumulated again, which should also be held for a longer period of time. He believes that it is also the holders who bought when the Bitcoin price started to rise. Moreover, Gayeski said:
If we look at the on-chain now, the data basically says that a lot of the strong holders are reasserting themselves and accumulating from those that came into the market late last year. And that it’s gearing up for some kind of supply shock, very similar to what we saw last October/November.
You could see this last year. Shortly after PayPal announced that it would allow investors to buy, sell or hold cryptocurrencies on its platform, the price of Bitcoin rose. Several companies invested in Bitcoin and it reached an all-time high of $64,000 – in May this year.
Risk-return ratio on the upside
Further, Gayeski added that while bitcoin will continue to be a volatile asset, at the same time it is not very correlated. Thus, the risk-return ratio is again nach upwards. Although the hedge fund remains bullish on BTC, Gayeski says he reduced his position just before the collapse.
Meanwhile, bitcoin is at a low of US$30,000 – after hitting its all-time high in May. It is currently hovering between US$40,000 and US$30,000. According to Gayeski, SkyBridge Capital has reduced the position and reallocated to Ethereum.
However, Gayeski remains convinced that Bitcoin will remain the market leader in terms of store of value, adding:
Bitcoin will be the market leader in terms of value storage and Ethereum, at least so far, will be the market leader in terms of transaction usage. So we have a little diversification there. All in all, we have a position size of 9%.
This is also reflected in the fact that the fund announced last month that while it expects gold to hit new highs, investors would be better off investing in bitcoin as the upside potential is higher.
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