In 2017, American hedge fund manager Mark Dow was grabbing headlines in the Bitcoin space. What Dow did was he shorted the leading cryptocurrency right near the historic $20,000 all-time high, that’s to say, he bet money on BTC falling.
He wrote in a blog at the time:
It feels like a bubble. The fever in the post-Thanksgiving moonshot ran hotter than we’d seen before. We also began to see a robust supply response. […] The odds of a continuation selloff are high.
At the time, if I recall correctly, you had analysts thinking Bitcoin was on its way to the “moon,” throwing out price targets of $50,000, $100,000, or more. So simply put: Dow’s play wasn’t all too popular.
But, Dow was proven right as the cryptocurrency bubble truly popped, with Bitcoin falling from the heights of $20,000 to $3,150 within the span of 12 months. Then, at $3,500, he closed his short, telling the world:
They just saw it was going up and wanted a piece of it. People’s imaginations can run further when they’re not tethered to facts, when they don’t understand the issue. I saw the psychological hallmarks of [a bubble] and there came a point where it looked like the fever was breaking.
Unfortunately or fortunately, depending on how you see it, Dow is back again. And surprise, surprise, he is still bearish on Bitcoin.
Bitcoin On Verge of Falling Off Cliff: Hedge Fund Manager
According to a tweet from Dow published April 14th, he thinks that Bitcoin is “right now, literally, hanging by its fingernails in the side of a cliff,” asserting that he thinks BTC is on the verge of falling lower.
— Dow (@mark_dow) April 14, 2020
This comes just days after he shared three Bitcoin charts indicating that the cryptocurrency, is facing overhead resistance at $6,800, one of the most important prices for BTC over the past few years.
Importantly, it wasn’t made clear if he is still trading the cryptocurrency, but he did mention this is a “textbook opportunity to short” the asset.
Part of a Minority
Unlike in 2017 and 2018, when many were expecting cryptocurrencies to pass over as if they were a fad, Dow is in the minority, that’s to say, there are many hedge fund managers and institutional investors buying Bitcoin at these prices, not shorting it.
For instance, as reported by Blockonomi previously, Fidelity Digital Assets — the crypto services division of Wall Street giant Fidelity Investments, a firm with trillions under management — has confirmed it has seen an uptick in interest. It told The Block’s Frank Chaparro that:
From a trading perspective, we continue to onboard new clients every month and are seeing significant pipeline growth. […] And in recent weeks, we’ve seen more momentum across our business.
This has been echoed by Mike Novogratz, formerly of Goldman Sachs and the current CEO of Galaxy Digital. He told Bloomberg this week that he has heard of strong adoption of cryptocurrency by institutional players, specifically pointing towards high-net worth individuals and hedge funds. This was one of the reasons why Novogratz said he expects Bitcoin to rally hard in 2020.
And to put a cherry on top of the crypto cake, Raoul Pal — a former Goldman Sachs executive and global hedge fund manager — said in a recent interview that he doesn’t know of a single family office that doesn’t have capital exposure to Bitcoin and cryptocurrency.