Bitcoin (BTC) Price To Drop And Bounce Back
The Bitcoin rate fell by more than 15%, reached 54,8 thousand dollars and bounced back, evidenced by data from CoinDesk.
As reported by Bloomberg, it was the most significant drop in cryptocurrency in more than seven weeks. Such a drop may be due to reports of a possible start of an investigation in the United States of money laundering through cryptocurrencies. In March, the US Federal Reserve System chairman, Jerome Powell, said that “cryptocurrencies are more of an asset for speculation.”
On April 14, the cryptocurrency set a record in value when one Bitcoin could be purchased for more than 64 K dollars.
However, on April 16, Bitcoin lost in value after the Central Bank of Turkey banned the use of cryptocurrencies and crypto assets for purchases, citing possible “irreparable” damage and transaction risks. The bank’s statement argued that crypto assets “are not subject to any regulatory or supervisory mechanisms” and pose security risks.
It should be noted that the quotes of the leading cryptocurrency are recovering, and as of April 19, the digital coin was trading at $56,3 thousand.
Investments in BTC remain high-risk, but some factors indicate the likelihood of further strengthening.
For example, the consultancy The Motley Fool estimated the growth potential of Bitcoin at $500,000 over the next 15 years and explained why.
Profit and media attention
Strengthening Bitcoin to $50,000 brought profit to investors and ensured it hit all the major media outlets. As a result, there are more and more people who want to invest in Bitcoin.
Along with the growth of quotations, the high interest of retail investors will stimulate active purchases of Bitcoin and affect its value shortly.
However, investments in this digital coin are still high-risk. Buying an asset in the hope of its further growth is a dangerous path since Bitcoin price can either continue to grow or fall several times.
Inflation protection method
Against the backdrop of the crisis, Bitcoin became a protective tool due to low-interest rates, which led to a drop in the yield of exchange instruments. Bitcoin protected its holders from risk and brought profitability tens of times higher than that of gold, which has risen in price by 30% in 2020. Investors increasingly turn to Bitcoin for hedging instead of gold.
The Motley Fool decided to use Bitcoin, including as a hedging tool to protect against inflation. The company’s analysts say that in the next 10 years, the volatility of the leading digital coin will decrease and allow it to become a full-fledged payment tool.
The historical behavior of Bitcoin quotes indicates a parabolic cyclicality. 2021 may indeed become a year of parabolic growth, repeating the fate of 2013 and 2017, but it is better not to rush things, relying on the psychological mark of $100,000 as a guideline in price. This mark, long before Bitcoin reached $20 thousand or $50 thousand, appeared in the media as a fair price for the first cryptocurrency, and in many respects, the community is oriented towards achieving it.
Earlier, Bitcoin rose sharply on the statement of the German company SynBiotic SE about the desire to transfer part of the funds to it and on the news that one of the largest holders of the first cryptocurrency among public companies, MicroStrategy, is preparing to invest another $900 million in it.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.