In a new market update, the research team of leading cryptocurrency asset manager Grayscale predicted that the cryptocurrency market would be able to recover from the most recent crash "in the coming months."
Its optimistic outlook is based mainly on the "broadly supportive" macro backdrop. Grayscale has mentioned the possibility of the U.S. Federal Reserve rate cuts as well as the thriving U.S. stock market.
As reported by U.Today, the price of Bitcoin crashed to $53,350, its lowest price point in nearly half a year, earlier this Friday on the Bitstamp exchange. Close to $700 million worth of crypto got wiped out within just 24 hours.
Gamza KhanzadaevGrayscale's research team identified several sources of this extreme selling pressure. They include the start of Mt. Gox repayments, the liquidation of Bitcoin holdings by U.S. and German governments as well as net outflows that were recorded by US-based exchange-traded funds in the second part of the month.
On top of that, the firm's analysts have pointed to miners selling more than $100 million worth of BTC in a month.
Despite these bearish headwinds, Grayscale believes that Bitcoin's fundamentals remain unchanged.
At press time, the cryptocurrency is changing hands at $56,433 after recording a relief bounce.
Grayscale's research team has also predicted that US-based spot Ethereum exchange-traded funds, whose final approval is expected to take place this month, will be able to attract "meaningful" net inflows.
The analysts have also spotlighted the weakness of the memecoin-heavy Consumer & Culture sector, which ended up being the biggest underperformer of July.
Valeria Blokhina
Gamza Khanzadaev
Tomiwabold Olajide
