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Crypto currency loosing steam : Experts divided



Bitcoin and the rest of the crypto market might be back in the green after a frenzied few weeks. The price of bitcoin was up more than 11 percent over the day on Monday morning, although the rise was not enough to correct all of the losses of recent days: most cryptocurrencies, though not bitcoin, are down over the course of the week.

Bitcoin rose above $40,000 on Monday. It was last up 1.8% at $39,686 as Elon Musk had tweeted on Sunday that the electric carmaker will resume allowing bitcoin transactions when miners who verify transactions use more renewable energy.

Musk has been a major promoter of cryptocurrencies but has turned critical of bitcoin since suspending Tesla plans to take it in payment for cars, owing to concerns that the computers used to “mine” it uses too much energy.

He said the market was also supported by the software company and major Bitcoin-backer MicroStrategy raising half a billion dollars to buy Bitcoin. Notably, Bitcoin is up about 33 percent this year but has collapsed from a record peak above $60,000 amid a regulatory crackdown in China and Musk’s apparently wavering enthusiasm for it.

Almost all cryptocurrency investment products and funds have seen outflows for a second straight week, with Ether posting record outflows as institutional investors have treaded cautiously. Total crypto outflows hit $21 million for the week ending June 11. Since mid-May, total outflows reached $267 million, representing 0.6% of total assets under management (AUM).

Ether, the token used in the Ethereum blockchain, posted its largest outflow last week of $12.7 million, data showed, despite being the strongest performers this year. Since hitting a record $4,380.64 on May 12, Ether has fallen 40%.

The outflows in bitcoin cooled last week to $10 million, significantly lower than the previous record week of $141 million, as per data. Trading activity in bitcoin products rose 43% from the previous week.

While bitcoin is currently trading 36% below its 11-year exponential trend, Dan Morehead, co-chief investment officer at Pantera Capital, said in his Blockchain Letter on Monday that investors should resist the urge to close positions and instead go the other way if they have the emotional and financial resources to do so.

“Bitcoin generally goes way up…Anyone that has held bitcoin for 3.25 years has made money,” said Morehead.

Grayscale, the largest digital currency manager, raised its AUM to $33.04 billion last week, from $30.3 billion the previous week.

CoinShares, the second-biggest digital asset manager also saw AUM slip to $3.8 billion, from nearly $4 billion the week before.

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