Bitcoin's drop shows 'irrational behavior' of investors, says manager

Source: Exame Original Title: Bitcoin's drop shows 'irrational behavior' of investors, says manager Original Link: The intense drop of bitcoin in recent days, with the cryptocurrency now operating below $100,000, has intrigued experts since last Friday, the 14th. One of them, manager James Thorne, stated in a publication that the episode would be another example of the “irrational behavior” of investors.

Thorne is the chief strategist at Wellington Altus, one of the largest and most well-known asset managers in Canada. He pointed out that the recent depreciation of the cryptocurrency is contradictory, as it occurs at a time when the “long-term case” in favor of the asset is strengthening.

The executive noted that the global macroeconomic environment is expected to improve soon, with the Federal Reserve giving signs of injecting liquidity into the markets through a more intense interest rate cut in the United States. Furthermore, it is anticipated that the leadership of the institution will change in 2026, potentially being replaced by a name more favorable to this movement.

“Political choices have already produced a real estate recession, for which the Fed is solely responsible. The combination of excessively restrictive financial conditions, delayed political response, and reliance on lagging indicators distorted credit availability and weakened one of the key sectors of the economy,” he commented.

The future of bitcoin

On the other hand, Thorne said that the outlook for cryptocurrency is increasingly positive. “The adoption of bitcoin continues to accelerate, driven by pending legislation that promises greater regulatory clarity. Yes, fiat money continues to be injected into the global economy. Nothing has changed.”

“The digital scarcity of bitcoin remains unparalleled, driving institutional adoption and fostering continuous innovation in financial markets,” the executive highlighted. In this scenario, he believes that the investment thesis in the cryptocurrency has been gaining momentum increasingly in the long term.

“Therefore, he classified the recent sales by investors as a 'classic example of irrational behavior in the markets.' 'The jargon 'buy low, sell high' is easy to say, but extremely difficult to execute,' Thorne also said, indicating that this would be a favorable time to execute that strategy.”

“Deep changes in liquidity and structural transitions often create opportunities that only seem obvious in retrospect. A market rally ends when liquidity dries up, not when it begins; this has always been the case,” he said. In subsequent publications, Thorne reinforced his projection that the Federal Reserve will inject more liquidity into the market, which would benefit assets like bitcoin.