Why did Bitcoin Plummet And What is its Price Outlook
Bitcoin plummeted, and it was like a roller coaster. The cryptocurrency fell 15% on Sunday, and rivals such as Ethereum and XRP also plummeted.
With the largest cryptocurrency exchange in the United States, Coinbase Global Inc. The first listing has inspired people’s enthusiasm for cryptocurrencies. Bitcoin hit an all-time high of more than $64,000 on Wednesday and then fell.
Although Bitcoin remained stable in late Sunday and early Asian trading on Monday, at around $57,000, it was still down about 12% from last week’s intraday high.
What caused Bitcoin’s tumble?
There is usually no answer, especially for opaque assets such as cryptocurrencies. It is often unclear who is buying and selling. The analyst pointed out the reason.
As retail and institutional investors further participate in digital assets, regulators around the world are paying more and more attention.
Last Friday, the Central Bank of Turkey stated that it will be prohibited from using it as a payment method from April 30. It will also prohibit companies that process payments and electronic fund transfers from processing transactions involving cryptocurrency platforms.
There are also speculations on the Internet over the weekend that the U.S. Treasury Department is preparing to crack down on money laundering through digital assets. The Ministry of Finance declined to comment.
Other sources of regulatory pressure include some central bank plans to create digital currencies, such as China’s digital renminbi and Inner Mongolia’s ban on the cryptocurrency mining industry.
Eva Ados, chief investment strategist at ERShares, an asset management company, said on Bloomberg TV that we will see more regulatory measures. He warned investors to be very careful. We believe that there will be greater volatility in the future.
What is the price outlook?
Any prediction about cryptocurrency, the problem is that there are not many basic indicators that can form the basis of the prediction. Many are due to speculation about whether institutional investors will buy, and whether big bitcoin players will sell. According to research firm Flipside Crypto, less than 2% of accounts control 95% of Bitcoin. This means that a large investor may have an excessive impact on this still illiquid market.
A major difference between the current and the long-term crash in 2017 is that many institutional investors are now participating in this market. Last week, Brevan Howard Asset Management reportedly became the latest money manager to invest in this digital asset.
Morgan Stanley (78.59, -2.23, -2.76%) and Goldman Sachs (342.31, 3.76, 1.11%) are planning to provide their clients with tools for cryptocurrency investment. In January, analysts at JPMorgan Chase (153.3, 1.13, 0.74%) suggested that the Bitcoin deadline might reach US$146,000. They recently cut this target to around US$130,000.