The Bitcoin boom!
London, England, 4th Nov 2021, Bitcoin reached an all-time high of around $67,000 just a few days ago, but to the surprise of many, investors are abandoning the world’s most valuable cryptocurrency in favour of the new child – or, more accurately, new puppy – in town: shibainu.
The price of one bitcoin has been on a roller coaster ride for the past few days, but overall, the token showed a12% down than last week’s record peaks. A decrease that severe in such a short period would be called a market correction for any other asset, such as a stock or bond, reported by Victoria-Coins Expert Phillip Houston. It’s just business as usual for bitcoin. Bitcoin’s volatility has become common knowledge among cryptocurrency speculators.
Despite the fact that CoinMarketCap lists over 13,000 cryptocurrencies, ranging from dogecoin and shibainu to more obscure tokens with even more ridiculous names, such as Elon’s Marvin, Dogelon Mars, Baby Floki Billionaire, and Kitty Inu…(because cat lovers own crypto too), bitcoin remains the dominant digital currency.
Bitcoin’s roller-coaster journey has resumed, sending a warning signal to potential investors interested in investing in the highly risky cryptocurrency.
First, Tesla CEO Elon Musk tweeted over the weekend that the price of bitcoin appeared to be excessive, just as the currency’s market worth reached $1 trillion. Then, on Monday, Treasury Secretary Janet Yellen declared bitcoin to be a “very inefficient method of doing transactions.”
The entire market value of bitcoins currently in circulation is $1.1 trillion. That’s roughly half the amount of the whole cryptocurrency market, which is worth $2.47 trillion. Ethereum, the Pepsi to bitcoin’s Coke, is valued at around $475 billion. All other cryptocurrencies are much less valuable than bitcoin and ether. That is unlikely to change very soon, especially with the introduction of bitcoin exchange-traded funds. The ProSharesBitcoin Strategy ETF began trading last week, followed by the Valkyrie Bitcoin Strategy ETF immediately after.
The ProShares ETF has already managed more than $1.2 billion in assets. The growing popularity of bitcoin ETFs, which follow bitcoin futures rather than giving individual investors ownership of actual bitcoins, should drive up the price of bitcoin in the long run.
Mr Houston has shared that some cryptocurrency analysts believe bitcoin prices will reach $100,000 by the end of this year or early in 2022. Aside from more typical people purchasing bitcoin ETFs, numerous notable institutional investors, like Paul Tudor Jones and George Soros, have also purchased bitcoin.
Other bitcoin proponents expect much higher price objectives. According to venture entrepreneur Tim Draper, bitcoin might reach $250,000 by the end of next year. But things are not as simple as they might seem to be. Facts and figures from the other spheres of crypto seem to be indicating something very different.
The other side of the story
There are indications that some traders are losing faith in bitcoin and other cryptocurrencies. An asset’s price cannot continue to rise at such a rapid pace indefinitely. Even with this week’s decline, bitcoin prices have more than quadrupled this year.
In its most recent financial report, brokerage firm Robinhood stated that “crypto activity decreased from record highs in the preceding quarter…and lower revenue in the third quarter of 2021 compared to the second quarter of 2021.”
Robinhood, a brokerage firm, predicts lower revenue for the third quarter of 2021 compared to the second quarter of 2019.
Additional declines and bear markets are unavoidable. The wild fluctuations in bitcoin values over the last several days may only be the beginning.
“We do anticipate bitcoin to reach $100,000 in the future — but not this year, because volatility is expected to persist through early 2022,” Gavin Smith, CEO of Panxora, a cryptocurrency investment consortia, wrote in an email.
“Bitcoin is a new asset class with considerable volatility. Therefore investors should proceed with care. Caution is advised, and any investment should be seen as speculative, “Smith elaborated.
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