A crypto investing veteran is offering insights on the road ahead for the two largest crypto assets by market cap.
In a new interview with CNBC’s Squawk Box, CoinShares chief strategy officer (CSO) Meltem Demirors explains that there’s an overall summer lull in crypto because many aren’t actively trading while on vacation.
“I think with Bitcoin we’ve seen a lot of buying on dips. There is sideline capital that’s looking to accumulate Bitcoin.
We love talking about dollar-cost averaging when it comes to Bitcoin. The big question is, flows have been fairly flat throughout the month of August. People are taking this thing called vacation. Although it trades 24/7, 365, especially Bitcoin has a lot of weekend liquidity, we still do see challenges from Friday evening through Monday morning just because the markets are not as active.”
Demirors concludes her Bitcoin analysis by saying she doesn’t expect much growth between now and the end of September.
“My outlook is flat through the remainder of Q3. No immediate upside catalysts for Bitcoin. It’s very tied to macro at the moment, as we’ve seen with the high correlation to tech equities.”
At time of writing, Bitcoin is trading even on the day and priced at $21,355.
Moving on to Ethereum and the buzz surrounding its scheduled mid-September transition from proof-of-work to proof-of-stake, the CoinShares executive cautions that excited investors might be viewing the upgrade within a vacuum that ignores wider market conditions.
“This upgrade to Ethereum is going to fundamentally change the supply-and-demand dynamics of Ethereum. While there is a lot of enthusiasm, or I would call it ebullience, around the Merge, I think one of the fundamental issues is people looking at the Merge as an upside catalyst for Ethereum, are looking at the Merge as an event in isolation.
[But] when you’re trading, or assembling or managing a portfolio, you don’t just look at a single asset. You have to view it in the context of a broader universe of assets, of rates, of the level of risk in your portfolio.”
Demirors adds that while the Merge will most definitely improve Ethereum as a working project, she doesn’t necessarily foresee significant amounts of investment capital pouring in to send ETH’s price skyward.
“While internally there’s a lot of enthusiasm within the crypto community and within the Ethereum community around the Merge as an event that will dramatically reduce supply while potentially driving demand, one of the realities is on the macro side people are worried about rates and macro, there’s a lot going on.
So I don’t think there’s a lot of new capital coming in to buy Ethereum on these changed fundamentals or technicals. There’s also some risk that I think will need to play out in the market, so in my view the Merge has been a buy-the-rumor, sell-the-news situation. The way people are playing it, primarily on the institutional side or through the trading side, is through options rather than through direct exposure.”
Ethereum has been falling steadily since August 18th, currently down by 2.2% and changing hands for $1,581.
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