According to the businessman, the sale is a natural manifestation of the inherent volatility of bitcoin.
Those who are willing to tolerate and accept such "rules of the game" receive impressive returns in the long run, the investor insists. Broad says that bitcoin is not a "stone without any value," but an asset whose value, like gold, is conditional.
"No asset in the world can be considered truly reliable. Gold, for example, requires storage and security costs; fiat currencies are systematically devalued due to emissions; even our own bodies and social connections are subject to degradation over time. The world is full of risks, and there are no guarantees," said Broad.
The main reason for the instability is the market's reaction to the change of the head of the US Federal Reserve System (FRS), the entrepreneur believes. Investors took this as a signal that the Fed could take a tough stance — raise loan rates and make zero-return assets, including bitcoin, gold and silver, less attractive. The situation was aggravated by margin calls on leveraged positions, which triggered a cascade of forced sales.
Broad lists among the reasons for the sharp decline in the value of bitcoin an increase in the volume of trading in BTC-ETF shares, rising electricity prices for miners, and the activity of early bitcoin holders who mined or bought coins at almost zero cost. Broad regards the sales of early holders as profit-taking, and not as a sign of a near market decline. According to Broad, even if the largest public corporate bitcoin holder, Strategy, starts selling off reserves, the number of coins sold will be small, and bitcoin itself will survive both this event and other pressures — although prices may temporarily decrease.
"Exchange-traded funds have allowed investors accustomed to traditional financial instruments to access bitcoin through brokerage accounts and pension funds. Bitcoin derivatives and futures enable parties to settle in fiat currencies without transferring real BTC. This increases the supply in the market, putting pressure on the price. However, in the long term, the limit of 21 million coins remains a key anchor of value. The history of the silver market demonstrates a similar mechanism: when physical demand begins to exceed the volume of paper payments, prices rise sharply," explained Broad.
Earlier, Matt Hougan, investment director of Bitwise, a crypto asset management company, promised an early depletion of the bearish cycle and an increase in bitcoin quotes.