The crypto markets have been scouring the floors of the market all though 2018 which is a sharp contrast to how the markets were faring back in 2017. Despite the market downturn, Billionaire investors such as Tim Draper, Jim Breyer, and Mike Novogratz of Galaxy digital still believe that the markets will recover and do very well in the long term.
There positive outlook on the crypto-currency markets has raised eyebrows especially since the valuation of the market has tanked by 85 percent across the board, the last several months. The big question is how are these billionaire investors able to hold their crypto investments despite the losses and still afford to remain positive?
These billionaires are able to do this because they account for a small part of their portfolios, making them able to handle large losses in emerging asset classes and high risk assets such as crypto-currencies like Bitcoin (BTC) and Ethereum (ETH).
As with other investments like Real estate and other traditional assets like stocks, billionaire investors are able to hold on to their assets and properties even during market crashes and the occurrence of a long lasting bear market.
In contrast, normal retail investors and individual traders are not as able when it comes to handling market turbulence and long lasting bear markets. These traders have no other option but to short their positions since they need quick money inorder to run day to day operations.
Individual traders and retail traders are not in a position to hold withstand an 80 or 90 percent drop in value forcing them to liquidate their positions while billionaire investors and large institution have the luxury to hold and sustain their portfolios.
The ability of billionaire investors to withstand huge market hits is understandable, but what makes them so optimistic about the future?
It has a lot to do with the historical performance of Bitcoin. Bitcoin has been through this 5 times before and each time has been able to rally stunning comebacks.
The market turbulence when it comes to Bitcoin is not new at all to big Wall Street investors. 2018 has proven the naysayers who believed crypto-currencies were a fad wrong, due to various industries and institutions building and strengthening infrastructure around the asset class. Some of the major institutions strengthening and building crypto infrastructure include; the New york stock exchange, NASDAQ and ICE.
Billionaire and founder of Galaxy digital, Mike Novogratz, believes the markets will recover next year, while Billionaire venture capitalist, Jim Breyer had this to say about his outlook on crypto; “So many of the very best computer scientists and deep learning Ph.D. students and postdocs are working on blockchain because they have so much fundamental interest in what blockchain can mean. You don’t want to bet against the best and brightest in the world.”
The Bitcoin market has in the past taken 67weeks to recover the past 5 times major corrections have been witnessed. 67 weeks from the time the markets hit highs of $19,500 would be the second quarter of 2018. The wait is still on.