Crypto billionaire Sam Bankman-Fried says bitcoin could switch to green energy with little fuss – and reveals SPACs are lining up to take his FTX exchange public

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Sam Bankman-Fried co-founded and runs crypto exchange FTX.

Sam Bankman-Fried, the 29-year-old crypto billionaire, has said that bitcoin could dramatically cut down on its energy use without killing off the cryptocurrency or setting back the industry.

He also revealed that special purpose acquisition companies, or SPACs, have been queuing up to take his FTX crypto exchange public, speaking in an interview with Bloomberg.

The computing process that secures and “mines” bitcoin has been criticized for using vast amounts of energy. Bitcoin enthusiasts have pushed back hard, saying detractors are blowing the problem out of proportion.

But Bankman-Fried told Bloomberg that bitcoiners need to take the issue seriously. “It’s not at all reasonable for bitcoin forces to decry it as sort of a witch hunt to bring up this question, because there is substantial energy usage happening because of bitcoin mining right now,” he said.

Read more: A 29-year-old self-made billionaire breaks down how he achieved daily returns of 10% on million-dollar crypto trades, and shares how to find the best opportunities

Yet he said there are a number of solutions that wouldn’t be too burdensome, such as switching to green energy or using carbon offsets to lower the industry’s impact on the environment.

“The answer is that it’s not free to mitigate, but it’s not that expensive,” he told Bloomberg. “It’s something the industry could pay without really setting itself back that much.”

Many bitcoiners argue that the industry will soon use predominantly renewable energy, given that it’s becoming cheaper and cheaper in advanced economies.

Bankman-Fried, who founded and is now chief executive of FTX, said he’s been approached by a number of SPACs about taking the crypto derivatives exchange public. SPACs are blank-check companies that raise money on the stock market and then find a target company to merge with.

He said FTX was one of the few “plausible exciting targets” for SPACs in the crypto world.

Bankman-Fried said the exchange does not have concrete plans, but said: “If we did want to go public via [a] SPAC, I don’t think finding the SPAC would be the limiting factor.”

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El Salvador’s ‘stupid’ decision to adopt bitcoin as legal tender could collapse the economy, economist Steve Hanke said

FILE PHOTO: El Salvador President Nayib Bukele speaks at a news conference during a nationwide quarantine as El Salvador's government undertakes steadily stricter measures to prevent the spread of the coronavirus disease (COVID-19), in San Salvador, El Salvador May 26, 2020. REUTERS/Jose Cabezas
El Salvador President, Nayib Bukele.

  • El Salvador’s approval of bitcoin as legal tender could lead to an economic downturn, Steve Hanke predicted.
  • The economist described members of government who passed the bitcoin law as “stupid”.
  • He predicted bitcoin holders in Russia or China would target El Salvador to cash out their holdings.
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El Salvador’s move to classify bitcoin as legal currency has the potential to completely collapse its economy, Steve Hanke, professor of applied economics at Johns Hopkins University, said in a Kitco News interview on Tuesday.

After describing President Nayib Bukele and members of government who voted to pass the bitcoin law as “stupid,” Hanke raised doubts about whether the cryptocurrency could work smoothly for everyday use in a country where most citizens don’t have bank accounts.

The economist, who served on former President Ronald Reagan’s council of economic advisers in the 1980s, suggested criminal interests may have helped bring about the Latin American nation’s adoption of cryptocurrency.

“The criminal element wants to be able to get in and actually obtain real legal greenbacks,” he said. “They want greenbacks. And greenbacks are, in fact, the legal tender and money in El Salvador.”

Hanke predicted bitcoin holders in Russia or China would exploit El Salvador’s citizens to cash out their holdings, ultimately draining the country of US dollars.

“It has the potential to completely collapse the economy, because all the dollars in El Salvador could be vacuumed up and there’ll be no money in the country,” he said. “They don’t have a domestic currency.”

Governments and central banks around the world will be watching El Salvador’s experiment to see whether bitcoin becomes part of daily life for payments and remittances.

But Hanke called the idea crazy, saying the digital asset will need to be converted to US dollars to be used anywhere. “You’re not going to pay for your taxi ride with a bitcoin, it’s ridiculous,” he said.

“If grandma is down in El Salvador waiting for her remittances, and you want to send it with bitcoin, that’s fine. What does she do? She has to go to the ATM to get dollars, because that’s the only way you can buy something,” Hanke said.

But the bitcoin bill mandates every business to accept the cryptocurrency as legal tender, unless it doesn’t have the technology to enable such a transaction. Further, the government is considering whether companies should pay salaries in bitcoin.

JPMorgan said last week that it was difficult to see any benefits of adopting bitcoin as a second form of legal tender, and the move could risk relations with the International Monetary Fund.

Read More: Deirdre Dunn started her career winning a hamburger-eating contest on the trading floor at Goldman Sachs. Now she’s one of Wall Street’s star traders at Citigroup.

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Bitcoin mania is making investors ignore other assets that have far more upside potential, an investment chief says

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A mural designed by Stacey Coon, Anastasia Sultzer, and Nanu Berks is seen at the Bitcoin 2021 conference.

Investment adviser Rich Bernstein said in a CNBC interview Monday that bitcoin is a bubble, and crypto mania is making investors ignore other asset classes that have more potential.

Institutional acceptance of bitcoin and other major cryptocurrencies has led to mainstream adoption, making it one of the most trending alternative assets. The fear of missing out on the cryptocurrency buzz led to a jump in the number of crypto wallets to 73 million in May this year, from about 49 million at the same time in 2020, according to data from Statista.

“It’s pretty wild,” Bernstein, the CEO and CIO of Richard Bernstein Advisors, told CNBC’s “Trading Nation.” “Bitcoin has been in a bear market, and everybody loves the asset. And oil has been in a bull market, and it’s basically, you never hear anything about it. People don’t care.”

According to the star investor, oil is the most ignored asset class and commodity traders have good reason for optimism.

“We’ve got this major bull market going on in commodities, and all people are saying is that it doesn’t matter,” he said.

Bitcoin was last trading 1.3% higher at around $39,815 as of 7:55 a.m. ET on Tuesday, but it’s fallen more than 36% in the past two months. Brent crude rose 1.2% to $73.75 and West Texas Intermediate rose 1.4% to $71.90. Both are up 97% and 89%, respectively.

By officially establishing itself as an asset class, the most popular digital asset has had a historic year as Wall Street titans like Goldman Sachs opened its trading floor to it. But Bernstein thinks bitcoin’s bull run isn’t sustainable in the longer term.

Investors could suffer portfolio declines over the next two to five years if they overlook other asset classes, he said. “The side of that see-saw you want to be on is the kind of pro-inflation side which most people are not investing in,” he said.

Bernstein listed energy, materials, and industrials as his top bets “because that’s where the growth is going to be” within the next six to 18 months.

Read More: Goldman Sachs says buy these 37 stocks that will offer strong returns with minimal risk through year-end as growth names regain leadership

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US stocks slip from record highs as investors mull weak retail-sales data ahead of Fed decision

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A trader blows bubble gum during the opening bell at the New York Stock Exchange (NYSE) on August 1, 2019, in New York City.

  • US stocks slipped from record highs as investors mulled the disappointing retail sales ahead of the FOMC’s two-day meeting.
  • The 10-year Treasury yield has hovered near 1.5% for most of the day.
  • Crude oil traded at the highest level since 2018, while lumber, gold, and copper slipped.
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US stocks slipped from record highs Tuesday as investors mulled the disappointing retail sales ahead of the Federal Open Market Committee’s two-day meeting.

Spending at US retailers for the month of May slumped for the first time since February as more economic restrictions were reversed and Americans settled into a new sense of normal.

US retail sales fell 1.3% in May, the Census Bureau. Economists surveyed by Bloomberg held a median estimate for a 0.7% decline. The decline places monthly sales at $620 billion and just below the record-high seen in April.

Meanwhile, investors continue to weigh inflationary pressures ahead of the FOMC decision due Wednesday. Most economists are anticipating that the central bank will leave its policy mostly unchanged. Investors will be focusing on tapering discussions, the latest economic projections, and inflation.

“Despite the ‘transitory’ message regarding inflation, some on the Committee must be twitching a little uncomfortably,” said Marcus Dewsnap, head of fixed income strategy at IGM, which is part of Informa Financial Intelligence.

Hard data so far hasn’t quite suggested the sort of second-quarter that will force economic growth to hit the Fed’s 2021 projection, Dewsnap added.

The 10-year Treasury yield hovered near 1.5% for most of the day.

In March, Fed officials saw consumer prices rising 2.4% in the fourth quarter of 2021 from a year earlier. That pace, they said, would be consistent with their goal of 2% average annual inflation over the long run.

Here’s where US indexes stood at the 4:00 p.m. ET close on Tuesday.

Online gaming company DraftKings plunged as much as 12% on allegations by a short seller of illegal activity. A report from Hindenburg Research, a short seller, claimed DraftKings is hiding “black market operations.”

Meanwhile, short-sellers betting against meme stock AMC Entertainment lost $512 million on Monday when the movie theater chain rallied 15%, according to Reuters, citing data from analytics firm Ortex.

Solid Power, an electric-vehicle battery producer, announced it’s going public by merging with blank-check firm Decarbonization Plus Acquisition Corporation III in a deal valued at $1.2 billion.

In cryptocurrencies, bitcoin finally hit the $40,000-level on Monday after trending below that level to date in June.

Still, a new survey found that hedge fund bosses are planning to ramp up their holdings of cryptocurrencies, predicting that an average of 7.2% of their assets under management will be held in digital tokens by 2026.

Crude oil traded at the highest level since 2018. West Texas Intermediate crude was up 1.96% to $72.27 per barrel. Brent crude, oil’s international benchmark, gained 1.78% to $74.16 per barrel.

Gold slid 0.45% to $1,858.92 per ounce.

Copper also tumbled to a seven-week low amid concerns that China will gradually release its stockpiles in the coming months.

Lumber joined the downturn, sliding for the 10th straight day before mounting a recovery as the pandemic-driven boom in the commodity continues to show signs of weakness.

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‘Long bitcoin’ is no longer the most crowded trade for big-money investors – but more fund managers than last month say it’s in a bubble, BofA survey finds

Bitcoin Bubble

“Long bitcoin” is no longer considered the most crowded trade by a group of big-money fund managers surveyed by Bank of America.

The cryptocurrency has been overtaken by commodities, with 26% of fund managers saying “long commodities” is the most crowded trade, putting “long bitcoin” in a tie for second place with “long tech stocks.” (Both received 21% of the vote.) Last month, 43% of fund managers said “long bitcoin” is the most crowded.

Despite the world’s largest cryptocurrency losing its first-place title, a growing number of managers told BofA bitcoin is in a bubble. 81% of managers said bitcoin is in a bubble, compared to about 75% of managers who said so in the May survey. These bubble concerns come even as bitcoin has lost roughly 37.5% of its value from its record high near $65,000 in April.

Though at its current levels near $40,000, bitcoin is up 38% year-to-date and 329% in the last twelve months.

The cryptocurrency’s rally in the last few days has been aided by comments made by billionaire investor Paul Tudor Jones. On Monday he told CNBC he likes bitcoin as a “portfolio diversifier and store of wealth.”

“I want to have 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities. I don’t know what I want to do with the other 80% at this point in time. I want to wait and see what the Fed’s gonna do,” Jones said, referring to the policy decision the central bank is set to make during its two-day meeting beginning today.

Bank of America surveyed 224 panelists with $667 billion in assets under management from June 4-10.

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Billionaire investor Paul Tudor Jones praises bitcoin, warns of rising inflation, and flags the ‘Buffett indicator’ in a new interview. Here are the 10 best quotes.

Paul Tudor Jones
Paul Tudor Jones.

  • Paul Tudor Jones praised bitcoin and warned about rising inflation.
  • The billionaire investor sounded the alarm on the “Buffett indicator” hitting record highs.
  • Jones suggested retail investors could flock to commodities and send their prices skyward.
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Billionaire investor Paul Tudor Jones trumpeted bitcoin, expressed concern about the “Buffett indicator” hitting record highs, and called on the Federal Reserve to take inflation seriously in a CNBC interview this week.

The Tudor Investment Corporation founder also raised the prospect of a retail-fueled commodity boom, recommended stricter margin limits on investors, and voiced his support for higher taxes on America’s wealthiest people.

Here are Jones’ 10 best quotes from the interview, lightly edited and condensed for clarity:

1. “I get nervous from a financial-instability standpoint when the stock market is 220% of GDP. I get nervous when that number is 45% higher than in the 2000 bubble, and 90% higher than at the 2007 top.” – referring to Warren Buffett’s namesake gauge, which compares the stock market’s total value to the size of the economy.

2. “When you look at the Fed today and the Fed in 2013, you wonder how you can have such wildly different policy views on what constitutes the right levels for employment, the right levels for inflation. It’s almost like a split personality.”

3. “We’re going to be where we were pre-pandemic by October. And yet we are quantitative easing and juicing an economy that’s already red-hot.” – warning that the Fed is stimulating the economy even though the surplus of job offers to unemployment claims is on track to hit January 2020 levels in the next four months.

4. “You’ve got the craziest mix of fiscal and monetary policy. It goes against all traditional economic orthodoxy. Things are absolutely bats— crazy.” – suggesting that the government throwing out the rulebook may have paved the way for the Capitol insurrection and the meme-stock and SPAC booms.

5. “If the Fed treats rising inflation with nonchalance, then it’s a green light to go all-in on the inflation trades. I’d probably buy commodities, buy crypto, buy gold.”

6. “If the Reddit crowd ever gets into commodities, God forbid. Commodities are generally finite-supply, small markets. If we ever got retail investors actually nervous about inflation, those things can double or triple with no problem whatsoever.”

7. “If I was Fed chair, I would have raised margin requirements two years ago. I would have said, ‘Okay, we’re gonna experiment with an unproven, untried, negative-real-rate economic program that is going to encourage a lot of leverage. We want asset prices to rise, we want you to take risks, we want to extend duration, but you need to be prudent in how you use your leverage and what you invest in.”

8. “Bitcoin is math and math has been around for thousands of years. I like the idea of investing in something that’s reliable, consistent, honest, and 100% certain.”

9. “I like bitcoin as a portfolio diversifier and store of wealth. I want to have 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities. I don’t know what I want to do with the other 80% at this point in time. I want to wait and see what the Fed’s gonna do.”

10. “It’s really difficult. You cannot tax unrealized capital gains because of the volatility. But should the top 1% pay more? Absolutely.” – commenting on the ProPublica report that found billionaires were paying little federal income tax relative to their net worth.

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Hedge funds expect to hold $310 billion in cryptocurrencies within 5 years – more than 7% of their assets

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Institutional interest in cryptocurrencies like bitcoin has jumped in 2020.

  • Hedge funds plan to ramp up their crypto holdings to more than 7% of assets by 2026, a survey showed.
  • That would equate to around $313 billion of cryptocurrency holdings, Intertrust Group said.
  • Hedge funds have been drawn to the volatility and huge price rises in cryptocurrencies such as bitcoin.
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Hedge fund bosses are planning to ramp up their holdings of cryptocurrencies, predicting that an average of 7.2% of their assets under management will be held in digital tokens by 2026, a survey has found.

That would equate to around $313 billion of cryptocurrency holdings, based on an estimate of the future size of the hedge fund industry, according to Intertrust Group, which carried out the research.

The finding is a sign that many potential institutional buyers are not being put off by bitcoin’s recent plunge, but see cryptocurrencies as a long-term strategy.

“Certain cryptocurrencies, such as bitcoin and ethereum, have delivered incredible – albeit volatile – performance in recent years,” said Jonathan White, global head of fund sales at Intertrust, a Netherlands-based professional services group.

“Inevitably, they have drawn growing interest from hedge funds as well as institutional and retail investors.”

Intertrust’s survey, first reported by the Financial Times, found that one in six respondents expect their funds to have more than 10% in cryptocurrencies in five years’ time. Just shy of all respondents said they expect to have at least some crypto investments by then.

The company polled 100 chief financial officers at hedge funds around the world, with average assets under management of $7.2 billion.

North American hedge funds were the most bullish on crypto, predicting that they would hold around 11% of their assets in digital tokens by 2026.

Given the secretive nature of the hedge fund industry, it’s unclear how much crypto exposure these institutions currently have. Yet most hedge funds that have moved into the space have only committed a small amount. For example, Brevan Howard plans to invest up to 1.5% of its main $5.6 billion fund in cryptocurrencies, it said in April.

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Ethereum saw record outflows last week, as investors pulled $13 million from the second largest cryptocurrency

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Ethereum products suffered outflows in early June.

  • Investors pulled $12.7 million from ethereum investment products last week, according to data from CoinShares.
  • The outflows mark a record high for ethereum after the cryptocurrency served as a ‘stalwart’ during bitcoin’s recent slide.
  • Bitcoin outflows are showing signs of cooling.
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Ethereum products were hit with outflows of $12.7 million in early June, the biggest decline on record as institutional investors were working out their views on the blockchain’s digital token after serving as a pillar of support during bitcoin’s recent plunge.

The data from CoinShares, a digital currency management firm, came in an update published Monday which also said outflows from digital assets last week reached $21 million, marking a second straight week of negative net investment.

The moves in ethereum marked a shift from the prior week when inflows were $33 million, illustrating that the ether token remained the top choice in so-called altcoins among investors.

“Ethereum has been the stalwart relative to bitcoin over recent months but inflows over the course of last week were mixed, implying mixed opinions amongst investors,” said CoinShares in its update. The price of ether dropped about 12% in the week ended June 11 and fell below $2,400.

Bitcoin, the world’s most traded cryptocurrency, was rocked by a recent selloff that began in May stemming in part from threats from China about cracking down on mining and trading and cryptocurrency taxation efforts by US officials.

But bitcoin outflows of $10 million last week were sharply less than the prior week’s record decline of $141 million. Trading activity in bitcoin investment products rose by 43% compared with the previous week, said CoinShares.

Total weekly outflows in digital products have reached $267 million since mid-May, which represents 0.6% of total assets under management.

“While sentiment has weakened over the last month investors on the whole remain committed given the magnitude of inflows seen this year which represent 13% of AuM, or $5.8 billion,” a figure that nearly matches the $6.7 billion logged in 2020, the company said.

Bitcoin this week has jumped above $40,000 after Elon Musk tweeted that Tesla would accept bitcoin payments again once mining can be done using cleaner energy. Meanwhile, ether’s price advanced and flirted with $2,600.

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Nearly 90% of cryptocurrency investors surveyed say they weren’t scared away by May’s brutal selloff and are planning to buy more

A woman standing in an office is holding a bitcoin in her hand.
  • 87% of respondents in a survey by cryptocurrency-asset broker Voyager Digital plan to buy more digital currencies in upcoming months.
  • Voyager said the survey indicates crypto buyers will take advantage of the recent market selloff led by bitcoin.
  • Crypto buyers are also bullish on cardano and optimistic about a bitcoin ETF this year in the US.
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The recent selloff that wiped out more than 20% of the cryptocurrency market’s valuation appears to have emboldened buyers to invest even more in digital currencies, according to a survey conducted by cryptocurrency-asset broker Voyager Digital.

87% of respondents in the company’s second-quarter retail investor sentiment survey said they plan to increase their crypto holdings over the next quarter. The survey captured responses from 3,671 participants at the end of May, during which bitcoin led a plunge in prices throughout the market.

The survey also showed an average of 7 out of 10 investors holding bullish sentiment for bitcoin price over the next three months.

Threats of bitcoin mining and trading crackdowns in China, taxation efforts on cryptocurrency transactions in the US and Tesla’s decision to stop taking bitcoin as payment for its electric vehicles stoked a 47% slide in bitcoin’s price during May, driving it to a low of $30,681.50 from $57,750.18 at the start of the month.

“It’s encouraging that investors remain bullish following the recent market correction,” said Steve Ehrlich, Voyager’s CEO, in a statement. “The fact that the vast majority of our large sample size of investors are more confident in the future of cryptocurrency shows how people see May’s volatility in many crypto-assets as a buying opportunity.”

Bitcoin’s market capitalization has dropped almost 30% to $766.6 billion since the start of May through mid-Monday, losing grip of the $1 trillion market-cap level.

The cryptocurrency’s market capitalization has been dragged down by roughly 21% from the start of May through midday Monday, standing at $1.74 trillion from $2.21 trillion. But the market cap has recovered somewhat after falling to $1.3 trillion in late May, aided by bitcoin’s price rising back above $40,000.

The survey showed 39% of respondents predict bitcoin’s price will move up to between $56,000 to $70,000 by the end of the third quarter, while 28% foresee the price between $41,000 to $55,000.

Bitcoin jumped above $40,000 on Monday after Elon Musk tweeted that Tesla would accept bitcoin payments again once mining can be done using cleaner energy.

Looking at so-called altcoins, Voyager said investors are most bullish on cardano, at 55%, followed by dogecoin at 11%. Meanwhile, more than nine of 10 investors expect the Securities and Exchange Commission to approve the US’s first bitcoin ETF this year.

Voyager said its results were based on a sample set of more than 1.6 million verified users in an anonymous online survey. Respondents were chosen based on a “highly active trader status” on the platform, with those users executing between 50 to 100 trades over a 30-day period.

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Ether and other major cryptocurrencies follow bitcoin higher after Elon Musk says Tesla may accept it as payment again

The photo shows physical imitations of cryptocurrency
  • Major cryptocurrencies rose in lockstep with bitcoin after Elon Musk tweeted that Tesla may accept the popular coin as payment.
  • Ether, tether, binance coin, cardano, and dogecoin, all edged higher over the last 24 hours.
  • An expert said she is unsure whether the most recent pop signals a continuing upward trend, but she does know one thing: “Musk is responsible.”
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Major cryptocurrencies rose on Monday, moving in lockstep with bitcoin‘s jump after Elon Musk tweeted that Tesla would accept the cryptocurrency as payment again once mining can be done using cleaner energy.

Bitcoin edged higher Monday following the tweet, inching closer to $40,000, its highest level in two week.

Here’s where the major cryptocurrencies stood in the past 24 hours as of Monday morning ET:

Alexandra Clark, sales trader at GlobalBlock, a UK-based digital asset broker, said that Sunday, when the Tesla chief tweeted, was a turning point for bitcoin, whose movements often influence the broader market.

“A number of analytic tools, including the spent output profit ratio and stock-to-flow, all firmly point to an undervalued bitcoin at current prices, although many analysts are still on the fence when it comes to determining whether the digital asset is ready to continue its uptrend,” she said in a note. “What we do know, is that Musk is responsible.”

The cryptocurrency market has yet to recover from its May crash when it suffered a sharp sell-off, wiping out 47% of its entire value. Most coins have been moving sideways as of late, after peaking to their record highs earlier this year.

Yet a recent finding from crypto-asset broker Voyager revealed that 81% of respondents in a recent survey are more confident in the future of cryptocurrency following last month’s crash. Steve Ehrlich, CEO of Voyager, said this increase was a much higher percentage compared to the last survey conducted in April.

But for Pankaj Balani, CEO at Delta Exchange, the surge is temporary. He said that given the market’s little appetite to own risk, most traders would be inclined to own bitcoin risk rather altcoins.

“We have seen altcoins underperform bitcoins in this bounce and we expect the same to continue over the next few months,” he said. “Capital has been rotating out of altcoins into bitcoin.”

Bitcoin market capitalization dominance, which had hit a low of 40% has already bounced to 46%.

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