Over the past year, people have really rejected the idea that bitcoin is just a speculative tool. Many are now looking at it through a new lens and see it as a hedge tool; something that can keep one’s wealth stable during times of economic strife.
Bitcoin Has Been Tanking…
The ongoing challenge of inflation – which has been prominent ever since the coronavirus pandemic first began striking against our global financial markets – has caused many people to see bitcoin as something that could do battle with rising prices and the downward trend of the U.S. dollar and other forms of fiat. Unfortunately, given how much the asset has dropped in recent days, this idea is now being challenged.
It used to be that bitcoin was only seen as something that could potentially cause one’s wealth to increase should luck play in a person’s favor. Up until the midway point of last year, many people thought that bitcoin was fun, but nothing that could be relied on. Things have ultimately changed since then, but it does not look like bitcoin is living up to its newfound reputation.
In April of 2021, the world’s number one digital currency hit its biggest all-time high of $64,000 per unit. The spike occurred after it was announced that Coinbase – one of the largest and most popular cryptocurrency exchanges in the world – was going public on the Nasdaq. Sadly, the rise did not last long, and even Coinbase stock began sinking in price after that.
For the past two weeks, bitcoin has fallen and has been trading in the mid-$50,000 range. Many analysts believe that a correction was due thanks to such a quick bounce in the price, but nobody could have expected such a resounding dip. Thus far, bitcoin is on the verge of losing nearly $20,000 in value in just the last four weeks, and things have taken a nasty turn for both analysts and crypto investors alike.
Still, however, there are those out there that swear by bitcoin, and refuse to allow its present numbers to shatter the image they have of it. One of those figures is Dan Held, the head of growth at cryptocurrency exchange Kraken. He firmly believes that the recent dip is not likely to go much further, and he says that bitcoin has developed solid ground within the $45,000 to $50,000 range.
Maybe Things Aren’t That Bad…
I do not think there was one singular catalyst that would either have pushed bitcoin up or down that is inflation related. Bitcoin moved so intensely upwards earlier this year. This was sort of a bitcoin catching its breath before another big leg up.
The recent drop below $50,000 likely stemmed from Elon Musk suddenly announcing that BTC would not be accepted as a payment method for Tesla goods and services.