Bitcoin Price Falls After Two-day Sell-Off

Bitocin price fell 8% on Thursday to $31,007, falling below the $32,000 level for the first time since January 11, according to data from CoinDesk.

Earlier this month, Bitcoin price hit $41,940 before falling below its Jan. 11 level this week. Though the main reason for the price decline isn’t clear, investors say it is likely a natural correction and there was no need to panic.

“Corrections are a natural part of any market and are especially natural in the bitcoin ecosystem,” said CEO of Grayscale Investments Michael Sonnenshein. “From 2016-2017, we experienced 6 corrections of approximately 30% or more on the way to new highs.”

The second-biggest crypto token by market value, Ether, was also down nearly 9% today, at $1,182. This came after the cryptocurrency hit an all-time high of $,439, earlier this week, according to data from Coin Metrics.

In the last two days, the total market value of all digital currencies fell more than $100 billion, dropping to $918 billion from $1.07 trillion.

“I think you.ve got to accept there’s a tremendous amount of volatility in bitcoin, and it’s still very early stages,” said Anthony Scaramucci, founder of SkyBridge Capital. “Imagine Amazon, and Jeff Bezos and a few venture capitalists are still holding most of Amazon, and the company is experiencing explosive growth, exponential activity.”

He added that Bitcoin’s moves can be compared to Amazon’s first 3 years in the market, when the company saw 50 percent price drops. The cryptocurrency’s latest decline in price comes after the new U.S. Treasury Secretary Janet Yellen mentioned that cryptocurrencies were “mainly used for illicit financing.” This came after the former Federal Reserve chairman said the US government needs to “examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.”

Despite the sharp fall of Bitcoin price, the cryptocurrency is still up over 140% in the last three months. The main reason for the upward movement of Bitcoin has been the rise of institutional demand, according to Bitcoin Bulls. Some asset managers are already adding Bitcoin to their portfolios.

Some Bitcoin believers have said that the market’s supply constraints and rampant money printing by central banks are the driving factors of bullish narrative. However, some others say that there is a bubble gradually building in the cryptocurrency market which could be a sign of risk in global markets.

“Who’s to say whether we’ve seen the bottom of the correction, but at Grayscale we know that there continues to be a flurry of demand, especially from institutional investors who have longer term holding preferences,” said Sonnenshein.

Skybridge Capital is one of the few financial firms that believe in the potentials of Bitcoin. It launched its Bitcoin-focused fund earlier this month, investing $25 million for a start initially, which has since risen over $60 million, according to Scaramucci.