The cryptocurrency market took a massive hit Wednesday when Bitcoin (BTC) broke through the $6,000 support level, falling below a $100 billion market cap and dropping to its lowest point in over a year.
Shortly after the initial drop, CoinShares chief strategy officer Meltem Demirors shared her belief that Bitcoin is currently facing a financial crisis as investors continue to take money off the table, while major altcoins are being plagued by a liquidity crisis.
In a recent interview on CNBC’s Fast Money, Demirors fielded numerous questions regarding the current state of the market, emphasizing that the majority of major altcoins are posting less than $10 million in monthly trading volume. These thin order books, coupled with an ongoing price depression, will inevitably lead to consolidation in the space, as some projects will cut back employees and others will simply disappear.
While Demirors shared some fairly bearish sentiment in the interview, she does believe that there are a number of upcoming bullish catalysts, including the launch of the Bakkt Bitcoin exchange in December and Fidelity’s custody service in January.
Ultimately, Demirors sees the crypto market as favoring the first entrant, similar to what happened during the dot-com bubble, meaning that the established digital currencies will likely be the ones to come out on top once the dust settles.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.