Faith in cryptocurrency boom shaken after worst week in months

This week, Bitcoin prices plunged 14 percent, marking the steepest fall since March. Commentators also warned that further losses could be foreshadowed by a continued drop below $30,000.

Hong Kong: This week, the sudden Bitcoin sell-off is sparking new concerns about the cryptocurrency boom’s longevity.

Digital asset prices have plunged 14% this week, marking the steepest fall since March. On Friday, Bitcoin was stable, staying near $31,000 and commentators warned that more losses could be foreshadowed by a sustained drop below $30,000.

A 10 percent intraday range is a mere flesh wound to the digital asset being Bitcoin, in an environment where tradable and investable is badly blurred,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte. “Tomorrow, the digital coin could easily be $35,000 again or could slip by $30,000 and test theoretical support at $27,000.”

On Jan. 8, Bitcoin’s rise to a high of nearly $42,000 embodied the acceptance of risk in stimulus-filled financial markets. Bitcoin is also becoming a more mainstream investment with a role to play in hedging concerns such as dollar weakness and higher inflation, some argue. As the digital coin has more than tripled in the previous year, some see nothing more than speculative mania.

One of the several crypto mysteries is determining who is largely responsible for the Bitcoin rally: Bitcoin funds, momentum chasers, billionaires, day traders, corporations and even institutional investors have been cited.

In the fourth quarter, for example, Grayscale Investments, which is behind a famous Bitcoin trust, saw overall inflows of more than $3 billion through its products. This week, for the first time, BlackRock Inc. dipped its toe into the crypto world, claiming cash-settled Bitcoin futures are among the investments that were approved to buy two funds.

Recent comments by Janet Yellen may be among the reasons for this week’s Bitcoin swoon, said Jehan Chu, managing partner with blockchain advisory firm Kenetic Capital in Hong Kong. In her Senate confirmation hearing, Yellen noted cryptocurrency as an area of concern for terrorist and criminal financing.

Describing such fears as “unfounded,” Chu said a “natural correction” is underway and that profit taking won’t “reverse the unprecedented assimilation of Bitcoin into Wall Street’s DNA, leading to $100,000 levels this year.”

We at most traded do believe as well that $100,000 Bitcoin is inevitable this year. If you also believe that you can triple your funds by investing in BTC you can invest click below and invest with Binance, which is one of the worlds best crypto exchange platform

Want to receive the latest stock and cryptocurrency news and investing ideas that can help you make money ?! Subscribe to our newsletter. Enter your email below and hit the subscribe button.