Bitcoin continued its fall this week, losing nearly 9% on Thursday and Friday amid one sale in the financial markets.
The cryptocurrency traded at just under $ 36,000 on Friday and has fallen 18% in the past month, according to Coinbase. Other major digital currencies have also plummeted. That’s what experts say about cryptocurrencies.
Furious volatility
The Federal Reserve raise interest rates by half a percentage point earlier this week and Wall Street responded with big gains on the stock market Wednesday. A day later, investors reversed course and brought down the markets – and lowered the prices of cryptocurrencies with it.
“Cryptocurrencies have tended to have a recent trend in the stock market,” said Michael Oliver, chief analyst at Momentum Structural Analysis.
Bitcoin is reflecting the Nasdaq, said Edward Moya, a senior market analyst at Oanda. He noted that the technology-focused index has fallen 21% this year, while bitcoin has fallen 22%.
Many investors hoarded bitcoins last year when it was priced between $ 32,000 and $ 36,000. A further drop of around $ 30,000 could lead to more sales, Moya said.
“Bitcoin is really stuck in a side news cycle where you’re just waiting for it to calm down on Wall Street and then you’ll see more people confident in investing,” he said. “I still think there’s a lot of potential long-term value here, but you have to be able to withstand that volatility.”
Delay in widespread adoption
Numerous events last year highlighted the growing importance of cryptography in financial services. More retail investors bought using the Cash or Robinhood app; a growing number of companies accepted bitcoin as payment for goods and services; and El Salvador adopted it as a legal course.
This year has been quieter, with fewer milestones to chart the progress of cryptography as an investment and medium of exchange.
“There is a belief that widespread adoption [of bitcoin] it’s taking a lot longer than people expected, “Moya said.” Right now, what we’re seeing is that the crypto market is in a standby mode. ”
Among other things, investors are looking to see what role cryptography plays emerging metavers and what rules a Biden task force can set for regulating digital currency.
Investors looking for safer ground
Chris Kline, co-founder of Bitcoin IRA, said much of this week’s fading cryptocurrency prices simply stems from investors ’reaction to what’s happening in the economy as a whole.
When the stock market stumbles, many investors move their money to less risky and more stable assets, such as U.S. Treasury bonds. Some bitcoin investors are weighing in on other investment options and “return their money to the dollar as a starting point, and then see what they will do from there,” Kline said.
Bitcoin hit a high of $ 69,000 last November. Analysts said on Friday that bitcoin could drop to $ 30,000 or $ 25,000 in the coming weeks before rising again later this year.
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- Cryptocurrency
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