Bitcoin (BTC-USD) ended last Friday at a five-week low. “Big whale” investors who have a substantially large position potentially booked profits. This hurts recent buyers, who bought Bitcoin ETF more recently. For now, BTC-USD is at $64,300, so the short-term low may not mean anything.
Stocks dependent on BTC prices risk underperforming. Last week, shares of Coinbase (COIN), Riot Platforms (RIOT), and Marathon Digital (MARA) lost around 5%. Investors could play it safe by considering stock trading platforms like Robinhood Markets (HOOD), Schwab (SCHW), or Futu Holdings (FUTU). Although those stocks also fell in sympathy with BTC, stock trading volumes are still healthy.
Skeptical investors who do not have a position in Bitcoin should watch the sector. Six years ago, CNBC held a funeral for Bitcoin when it traded at $6000. Investors who doubted it then would have missed out on a ten-fold return.
Should the government report evidence of economic weakness, BTC prices would rise. Investors would buy BTC in anticipation of the Federal Reserve cutting interest rates. That hurts the U.S. dollar’s value and increases the attractiveness of BTC.
Your Takeaway
Watch for markets to buy the dip in Bitcoin. If they do, Ethereum (ETH-USD) would also rise.
