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The cryptocurrency, Bitcoin, has abruptly changed from being the most volatile asset in the world to becoming the most submissive. It has confused investors over the past five months by offering prices that can’t be beaten. Why is Bitcoin failing?
Since the beginning of June, the price of Bitcoin has been circling about $20,000 and has steadfastly resisted falling any lower or beginning a substantial rebound.
Investors don’t anticipate the world’s leading cryptocurrency to stall this way.
Bitcoin Price History
There is no doubt that a lot of time has passed since the launch of Bitcoin in 2009 when discussing the evolution and movement of its price. We monitored Bitcoin’s price changes in 2021 to determine its level of volatility.
The price record for Bitcoin set in 2020 was reached in 2021 in less than a month. On January 7, 2021, the price of BTC soared above $40,000.
After then, Bitcoin rose to an all-time high of US$60,000 in mid-April 2021. This increase results from Coinbase’s decision to list on the stock market on April 14, 2021.
A new low of $29,000 was reached on July 19, 2021, after a 50% decline in the price of BTC throughout the summer of 2021.
BTC momentarily reached $52,693 in September 2021, a few months later. A large decline occurred around two weeks later, and the price retreated to $4,709.
Bitcoin: Does It Still Exist? Or Is It Just Sleeping?
On November 10, 2021, Bitcoin reached a record high of $68,789, a breakthrough in international trade. After a year, it declined by over 50%, hovering around $20,000.
Bitcoin crashed along with pretty much everything else this year as investors’ moods are crushed by the conflict in Ukraine, supply disruptions following the coronavirus, and escalating inflation.
When central bankers and politicians flooded the market with unending monetary and fiscal stimulus to combat the global financial crisis and its effects, Bitcoin was the product of that easy money era, especially during the Covid-19 time.
The Federal Reserve and other institutions are draining liquidity from the markets and stoking inflationary fires, bringing the era to a quick and painful conclusion.
Many asset classes have been affected, including cryptocurrencies. Real estate appears to be the next market to experience declines after stocks, bonds, and even gold.
The biggest shock is that, in contrast to other asset classes that have been destroyed by the world’s numerous political and economic turbulence, the Bitcoin price has remained remarkably stable (around $20,000).
Bitcoin was “more volatile than the total UK sovereign debt market. It was thought to be demeaning,” Consultant Raymond James stated.
What Is The Future Of Bitcoin?
Bitcoin was not magically transformed into digital gold through financial alchemy.
Myron Jobson, a senior personal finance advocate at Interactive Investor, advised that investors shouldn’t use Bitcoin as a refuge in difficult circumstances. According to him, it penalised those who viewed it as a store of value.
However, the present stability may pique the interest and tempt many investors. Bitcoin seems to be patiently waiting for things to change.
After a challenging results season, tech stocks have once again been dumped, while cryptocurrencies have mostly kept their value, according to Simon Peters, a cryptocurrency market analyst at the social investment network eToro.
This is puzzling because the two asset classes have been “strongly connected” thus far this year.
According to one theory, the proportion of money held in cryptocurrencies has remained at an all-time low over the past three months, and traders have become resentful as a result of the Bitcoin fall.
What Will Happen?
Investors in cryptocurrencies who intend to hang onto their Bitcoin investments for the long run have few reasons to do so at the current low prices. There may be a bigger temptation to sell equities, given the state of the crypto market and the unfavourable earnings expectations from firms. While volatility and selling have slowed and prices may have “bottomed out,” Bitcoin is “stubbornly” clinging onto the $20,000 level.
Global inflation, an impending recession, and a lack of faith in the crypto market might all prolong a “crypto winter”. Although it is unlikely to persist indefinitely. Investors most definitely are still interested.
Bitcoin is in low supply, and the total supply of the cryptocurrency is $21 million. As the supply and demand of Bitcoin slows down, the price will not seem to go higher.
Long-term fear in the market indicates that investor momentum will take some time to revive. Pretend demonstrates that sentiment continues to be the key driver of cryptocurrency movements. A more dovish approach will be taken by the Federal Reserve.
The summer surge, though, indicates that Bitcoin might gain if rate hikes ultimately reach their peak and sentiment improves in 2023.
In anticipation of the next crypto summer, that outlook might tempt some investors to buy, but market emotion isn’t the only element influencing performance, according to Kopelman. In the end, he says, adoption and a resurgence of cryptocurrency depend on trust and crypto regulatory clarity.
Bitcoin Price Prediction In The Future
By 2023, we anticipate that more financial establishments will accept cryptocurrency as a form of payment. There are claims that Google and Coinbase have made their relationship official.
In 2023, we expect more banks and financial services companies to join as titans like Google enter.
Because everyone is worried about a recession, speculation is currently outmoded.
When others are scared, those with extra income may be enticed to buy Bitcoin, but as always, always invest money you can afford to lose.
By 2025, experts predict Bitcoin will reach $80,000.