Deepening fears of a US recession, the unwinding of the Yen carry trade, large crypto liquidations, and escalating geopolitical tensions have combined to create significant market volatility in the last few days.
This volatility hasn’t spared Bitcoin, which fell almost 25% to a seven-day low of USD 49.9K before recovering to USD 57K as of August 6. Is it all doom and gloom, or is there hope on the horizon?
In this note, we share our perspective, including insights from member activity at Xapo Bank.
Source: CoinMarketCap
We are long Bitcoin
First off, what does it mean to 'go long' on Bitcoin? In crypto terms, going 'long' means you're betting on the market and holding onto the coin with optimism for its future growth. Since our inception in 2013, we have been steadfast in our belief about Bitcoin’s transformative potential, regardless of market fluctuations. Market dips and price swings are natural parts of the Bitcoin journey, and they do not deter us from our belief in its long-term utility.
Unlike exchanges, which focus on trading and Bitcoin price action, our focus is on helping members sustainably grow their wealth long-term using Bitcoin. Even price tells a different story when viewed from a long-term perspective. For instance, despite the recent drop, the Bitcoin price has more than doubled from a year ago.
Source: Investopedia
Our members share this view
We have observed significant outflows of Bitcoin from exchanges, likely representing a shift in mindset from having Bitcoin available to trade to keeping it secure for future opportunities. Unlike exchanges, we’re seeing a substantial inflow of Bitcoin.
Source: CryptoQuant
This trend highlights the trust our customers place in Xapo Bank's secure storage solutions.
Our members view us as a secure haven, choosing to transfer their Bitcoin to Xapo Bank for safekeeping after mining or purchasing on exchanges.
There is also evidence of long-term Bitcoin plays in our members’ activity. On average during periods of low volatility, roughly 40% of members transacting in Bitcoin tend to buy and 60% sell.
Over the past week, the number of members transacting increased by more than 125%, of which 75% bought Bitcoin and 25% sold.
Bitcoin volumes at Xapo Bank reflect these trends. Overall, Bitcoin volume in the past week has increased a whopping 800% vs. the average, our highest volume ever. Of this, 74% was buy volume, and 26% was sell volume.
Concluding thoughts
Member activity during ongoing market volatility underscores Xapo Bank’s proposition as the best destination for growing wealth long-term, Bitcoin or otherwise. We remain dedicated to providing the most innovative, secure and reliable ways to hold Bitcoin.
