The sharp fluctuations seen in the cryptocurrency market since the beginning of October are surprising even those who have spent many years in the industry.
Jaime Leverton, former CEO of Hut 8 and an industry veteran, commented on recent price movements, saying, “None of us expected to be at this point.” Despite this, Leverton still believes market indicators are quite strong.
Leverton noted that while there are signs of a return to the classic four-year cycle, this may largely be due to the sector fulfilling its own expectations. “Many people who have been in this market for a long time have moved to sell,” he said. “But structurally, I don’t see any reason why we’ll be returning to a typical bear cycle.”
Leverton noted that Bitcoin quickly recovered after briefly dipping below $90,000, adding that a significant protective wall had formed at $85,000. He argued that factors such as institutional buying from Harvard, the fact that companies building digital asset treasuries have not yet entered the market, and the potential for new stimulus checks to create demand similar to that seen during the COVID-19 era are supporting the market.
According to Leverton, the end of the government shutdown also marked a significant turning point for the crypto market. The shutdown both suppressed risk appetite and delayed many transactions in the capital markets. “Now that the government is back in session, upcoming data could change sentiment quickly,” he said.
Leverton has been closely following the mining industry since his time at Hut 8. While some Bitcoin miners have recently been turning to high-performance computing infrastructures for artificial intelligence, Eric Trump’s company, American Bitcoin, announced that it would not pursue this path and would focus solely on Bitcoin mining.
Leverton stated that this strategy difference should not be seen as “right or wrong,” and that decisions should be made based on which model offers the higher return on energy resources: “Companies that manage power correctly and can switch between Bitcoin mining and HPC when necessary can introduce major innovations.”
*This is not investment advice.
