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Bitcoin Volatility Less This Time Around As Mainstream Beckons

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Bitcoin’s volatility has often been problematic, with some huge swings in the digital currency when it peaked in 2017. The difference now, however, is that billion dollar institutions – such as Tesla, are now investing in this alternate asset class and bringing it into the mainstream. 

So, what’s behind Bitcoin’s 2021 rise?

While Bitcoin reached almost $50,000 last week, and a record high for the first time in three years, the price of BTC  has been fluctuating over the past few days, as the markets respond to the increase in demand from big investors such as Tesla, Mastercard Inc, and New York Mellon.

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Bitcoin seems to be going corporate at a rapid rate, which speaks as much to its decreasing volatility, as it does to it’s value as an asset class. While global companies are investing in Bitcoin, it is on Wall street where the volatility of this digital currency is still dividing opinion.

Wall street is no stranger to volatility, with (albeit smaller) market swings back in the early FX days. The fluctuations of the traditional asset class, however, pale in comparison to the highs and lows experienced  with crypto assets.

Despite the still volatile markets, the swings in Bitcoin are however, much less volatile than they were in 2017 when this cryptocurrency was peaking. An investment unit of Morgan Stanley is currently considering whether to bet on Bitcoin, and hedge fund managers such as Paul Tudor Jones, are all helping to legitimise Bitcoin as an asset class.

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Bitcoin is a global asset, and therefore less likely to be affected by the financial situation of any one country. Thus far, the stand-out influence that shaped the crypto-world in 2020 was the global pandemic. The covid-19 pandemic impacted financial markets across the world, and led to many investors turning to Bitcoin as a way to protect their assets. The effect of coronavirus on cryptocurrencies, is both a factor in its recent volatility, but also one of the reasons corporate and institutional investment will eventually lead to a reduction in this volatility.

As demand broadens, the volatility of cryptocurrencies will inevitably decline as key financial players show their support. The ambiguity still surrounding Bitcoin, may make its regulatory process a long and arduous journey, but Bitcoin enthusiasts are keen to draw attention to the long-term focus and the much smaller swings in this asset class compared to three years ago.

As Bitcoin makes its way into the mainstream, the uncertainty surrounding this asset class will reduce, as will its market fluctuations. While governments may be slow in their acceptance of this digital currency, tech moguls, hedge fund managers, and global companies are changing the narrative to one where broad acceptance by conventional finance people,  sees the global adoption of Bitcoin accelerating.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Bitcoin Drops as China Declares Crypto-Businesses Illegal

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  • China declared that cryptocurrency-related businesses are illegal
  • Bitcoin, Ether, and stablecoin Tether do not qualify as legal tender in China
  • BTC drops in price as the announcement went out

Once again, China reiterated its antagonistic stance on Bitcoin and the cryptocurrency industry as a whole.

In an announcement, the People’s Bank of China (PBOC) mentioned that BTC, ETH, and USDT are not legal tenders in China. They added that these cannot be used in the currency market.

Additionally, the central bank deemed all crypto-related businesses as illegal. This includes overseas exchanges serving residents within China and derivative transactions.

Following the news, Bitcoin’s price fell by almost $2,000 as the news circulated. This has been a common pattern whenever China FUD comes out.

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Earlier, China also reiterated its stance on crypto trading and mining while testing the Digital Yuan. According to the PBOC, it will continue releasing regulatory pressure over the crypto trading industry.

Despite the negative news, many analysts remain bullish on Bitcoin and the cryptocurrency industry as a whole. According to analyst Lark Davis, this is not new and will happen again in the future.

In a tweet, Davis mentioned that “The year is 2025, #bitcoin has just corrected from 400k to 250k on China banning BTC fears.”

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Can Bitcoin Surpass $6,000,000? Ethereum and Polkadot Creator Details Possible Future of Crypto

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Early Bitcoin developer and co-founder of Ethereum and Polkadot, Gavin Andresen, is outlining a future where BTC rises to a staggering $6,000,000 per coin.

Gavin Andresen, who took over as Bitcoin’s lead maintainer from founder Satoshi Nakamoto in 2011, just published a new blog post detailing how BTC’s theoretical evolution could look.

Andresen describes a “possible” scenario where Bitcoin hits a price tag of $6,000,000 by 2061, transaction fees 326x higher than they are now, and the blockchain is used chiefly by whales.

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“Imagine: it is the year 2061. The BTC price is six million US dollars – equal to about a million 2021 dollars because of inflation.

Miners are being rewarded 0.006103515625 BTC per block, plus transaction fees of about 5 BTC for 4,000 or so transactions ($7,500 per transaction).

But most BTC transactions don’t happen on the BTC network. Most BTC is locked up in multi-signature outputs secured using multiparty computation and mirrored on another chain as ‘wrapped’ tokens.”

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In his scifi scenario, Andresen says those who do remain on Bitcoin’s network will be incentivized to keep it alive.

“The transactions that do occur on the main BTC network are high-value, mostly between super-whale-size holders…

These whales maintain the BTC network forever. They are the miners and the transaction creators; they don’t care how high transaction fees go, because they receive as many fees as they pay.”

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However, Andresen says that by 2100, even those users would likely leave the blockchain.

“In the year 2100 the whales notice that the mining reward is basically zero… Eventually, there are zero new BTC being produced on the BTC network, and zero BTC circulating on the BTC network. There is nothing left to secure, and the chain stops.”

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

Crypto trader Michaël van de Poppe is looking at what’s ahead for Bitcoin (BTC) and the smart contract platform Cardano (ADA).

The analyst tells his 420,000 Twitter followers that the best entry point for Cardano may be gone after the asset bounced off a key support level at $1.86.

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“If you want to get into Cardano, this was the region where you would want to get into it, and the higher low that might be created.

So based on the daily timeframe, the best entry might be gone, but you’re still getting a better entry than the ones who have been buying around $2.80.”

Van de Poppe is now looking to see if ADA can turn resistance at the $2.37 level into support.

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If the markets correct further, he is keeping an eye on the $2.15 level as a potential buy zone.

“When you’re looking at the four-hour time frame, I think you’re getting the exact same view as what you have right now on Bitcoin and [Ethereum], actually. So you’re going to look for an entry point which is around the fact of $2.15, so anything in this region might be a good entry point if we get a corrective move.”

Looking at the Bitcoin pair, van de Poppe thinks that ADA will most likely consolidate briefly after retesting support at its previous all-time high.

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“We can see that we’ve had a beautiful retest of the previous high here too, and therefore some consolidation is most likely going to take place before we’re going to have new impulse waves.

So both the USDT and BTC pair are looking for continuation, and I think that’s just great, and I think that’s just what we want to see with the markets right now.”

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