Bitcoin Rise Yet To Cover Its Decline: Analyst

Bitcoin has had a good few weeks. In mid-August, BTC experienced a bounce after a couple of sleep months stuck in the doldrums. Coinshares Senior Portfolio Manager Marc des Ligneris see renewed investor interest as partially driven by the US Department of the Treasury’s bond buying activity. At the same time, he reminds everyon that Bitcoin has still not recovered from its previous highs.

“By doubling its purchases of long-term debt securities outside the usual refinancing schedule, and thereby departing from the principle of “regularity and predictability,” the US Treasury has helped awaken Bitcoin from its recent slumber,” says des Ligneris, tying this activity to a sharp rebound in price, amplified by a significant shorts and limited hedging activity.

“ETF inflows have also been substantial,” adds des Ligneris, while posing the question as to how the much has the market “re-exposed itself” to Bitcoin.

“A significant portion of ETF inflows has instead been used to rebuild carry-trade positions, taking advantage of the sharp increase in the CME futures basis. As a result, the massive outflows recorded in June and July are still far from being fully reversed, and genuine market re-exposure remains relatively marginal.”