The surge in sell orders contrasts sharply with the renewed Bitcoin bull run – Bitcoin News

Along with the meteoric rise of cryptocurrency in the second half of 2020 and early 2021, a curious phenomenon has unfolded; increased profit taking and conversion to fiat currencies. Data collected by Simplex, a fiat-crypto gateway, underscores this seemingly paradoxical development.

Curious Race to Convert Crypto to Fiat Has Accompanied Bitcoin’s Latest Rise

Exclusive data sharing with Bitcoin.com, Simplex Netanel Kabala, Co-Founder and Chief Analysis Officer, says:

While international media coverage of the Bitcoin rally sparked an influx of new users to the industry and membership, the outflows were just as significant. Of the total amount of cryptocurrency sold in the past six months, 43% was reduced in December alone.

A quick look at Google Trends for the term “ Bitcoin ” echoes these developments, especially now that new equity instruments like Bitcoin Trust in Grayscale and deep funds like Blackrock add visibility and increase crypto awareness.

Nonetheless, given the increased ability to quickly convert crypto and withdraw into fiat currencies, the surge in funds leaving the ecosystem is astounding. This can be attributed in part to the growing fungibility of cryptocurrency, mainly aided by the support of players like Simplex, which allows users to buy, sell and spend crypto through Visa partnerships.

While some onlookers at the latest rally decried the rapid rise in crypto valuations as evidence that a bubble is forming in this nascent asset class, others in the industry see the development as a harbinger of time to come. One of the most apparent areas is that of altcoins.

Data compiled by Simplex shows that while Bitcoin prices have stabilized above $ 30,000, daily altcoin purchases have increased by around 65%. More interestingly, the data highlights that new users account for almost 20% of that volume, marking a sharp increase in the number of newbie investors expanding and diversifying their exposure within the ecosystem.

Poloniex, one of the world’s top 20 cryptocurrency exchanges, which has adopted the platform from Simplex, has seen these results firsthand. Karen McHenry, Chief Product Officer of Poloniex, attributes this development to better access within the ecosystem, particularly with the option to buy Simplex, which promotes instant account funding as well as increased ability to cash out. quickly.

She also doesn’t see the opportunity to move faster from crypto to fiat currency as damaging interest despite the impressive amounts withdrawn from the exchanges.

It may seem surprising, but the addition of the “ sell ” option also has a positive impact on the number of crypto transactions.

While this easy deployment and growing volume of sell orders may seem like a price negative, it can also be seen as a healthy reflection of the ecosystem’s growing use cases. In addition to making it easier to exit and enter, growing areas such as decentralized finance (challenge) and greater fungibility all contribute to a cryptocurrency’s value proposition.

As institutions begin to line up to add exposure as retail accumulation climbs, Bitcoin’s momentum may actually accelerate and by extension raise the altcoins that newbies seek. newcomers looking for opportunities outside of the seminal crypto-coin.

McHenry adds:

If the bull market can maintain its momentum, some of these BTC profits will go to altcoins, which are especially popular among retail investors. This creates a positive feedback loop, with profit-making traders inclined to tell their friends about crypto, bringing more investment into the space.

Do you think the offramping will continue throughout 2021? Let us know in the comments sections below.

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