- A widely-followed economist says suppressing bitcoin price can kill the cryptocurrency.
- Research supports this assessment as retail traders still dominate the market share.
- The strong correlation between bitcoin and Google searches point to the vulnerability of retail traders to price manipulation.
Alex Kruger, an economist and trader, took to Twitter to share his thoughts on how anyone can eliminate bitcoin for good. While tech specialists might invest a ton of cash to control 51% of the network, Mr. Kruger says that one does not need to go through that process. The economist claims that any government can kill bitcoin by keeping the price below $1,000.
Mr. Kruger is right on the money. If a government can suppress the price of the dominant cryptocurrency, people will eventually lose interest. That could spell the end of an asset that relies heavily on retail investor interest to keep its head above water. Over time, price suppression will suck the passion out of the most die-hard bitcoin supporters.
Bitcoin Still Largely Driven by Retail Investors
In July, a CoinShares research report noted that bitcoin’s rally from the $3,000 levels to $13,880 this year is different from the 2017 bull run. One defining quality of this year’s ascent is that the rally was likely driven by institutional money.
The entry of big players is certainly an encouraging development. However, retail investors still dominate bitcoin’s market share. CryptoFundResearch revealed that there are approximately 804 cryptocurrency funds. These funds account for $18.16 billion of the cryptocurrency’s market capitalization.