The world’s most popular cryptocurrency, Bitcoin, surged to a record $61,000 (+/- R900,000) at the weekend. The controversial cryptocurrency seems to be gaining traction with more investors on a daily basis, with influential tech heavyweights such as Elon Musk sticking his hand up and declaring himself a fan. His electric vehicle manufacturer, Tesla, has bought $1.5bn worth of the cryptocurrency. Still, many remain sceptical of bitcoin. Despite the record high, it ‘retreated in the following days’, according to reporter Eric Lam. Speaking to Bloomberg, Luno’s Vijay Ayyar says the volatility is due ‘to investors taking some profit after Bitcoin’s recent run’. – Jarryd Neves
Bitcoin steadies near $56,000 after weekend rally evaporates
By Eric Lam
(Bloomberg) – Bitcoin has given up all the gains made over the weekend, when prices reached a record $61,000.
Prices for the largest cryptocurrency shot up on Saturday, only to quickly retreat in the following days. The largest cryptocurrency sank almost 7% on Monday and was little changed on Tuesday, trading around $55,900 during the London morning.
The volatility is due to investors taking some profit after Bitcoin’s recent run, said Vijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore. He predicted that prices may bounce back to $62,000 before another slide down.
Crypto traders have been positioning for the arrival of US stimulus checks and betting on some of that money finding its way to Bitcoin. Bitcoin has surged some 1,000% over the past year, a mesmerising rally that outstripped more traditional assets like stocks and gold.
“We’ll see buying resume, given the stimulus coming in and stock markets starting to look good again,” said Ayyar.
Bitcoin and other cryptocurrencies have returned to prominence over the past year amid signs of broader investor interest, such as Tesla’s $1.5bn Bitcoin purchase. Detractors argue the token may be in a speculative bubble spurred by massive stimulus injections.
Drop expected
The crypto craze is feeding into pockets of the stock market. For instance, stocks linked to the mining and trading of the digital asset are soaring, in some cases outpacing even Bitcoin – US-listed miners Riot Blockchain and Marathon Digital Holdings are up more than 8,700% over the past year.
“There will certainly be some correction in Bitcoin and other cryptocurrencies because they have rallied so much in a short period of time,” said Atichanan Pulges, chief financial officer of Bitkub Capital Group, operator of Thailand’s biggest cryptocurrency exchange.
“The long-term outlook remains very bullish, as many more leading financial institutions are considering adopting cryptocurrencies,” Atichanan said.
– With assistance from Anuchit Nguyen.
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