The largest cryptocurrency, Bitcoin by market capitalisation has had a massive price crash of $80 billion since the beginning of the year, bringing it to its lowest levels since early December. However, there have been expectations that it will hit the renowned $100,000 level this year.
Bitcoin and cryptocurrency prices declined this week as the United States Federal Reserve Board’s released minutes from its December meeting, revealing a policy shift that doesn’t bode well for cryptocurrency.
The recent cryptocurrency price crash made Bitcoin’s rate go down 9% for the week, to $38,040 in the new year, after plummeting from approximately $41,500 after the news emerged. From its November high, the world’s largest cryptocurrency has lost more than a third of its value.
The rest of the crypto market, meanwhile, followed Bitcoin’s lead. The price of Ethereum (ETH) has dropped 10%, the price of Binance Coin (BNB) has dropped 11.5 percent, and the price of Solana (SOL) has dropped 14 percent.
However, according to Bloomberg Intelligence Mike McGlone, Bitcoin is a risk asset that is evolving into a digital-reserve asset in a world that is moving in that direction, and this has a favourable outlook for its price.
He stated in a letter that the currency is “going toward $100,000”.
“Among the dangerous and speculative, cryptos are at the top. If risk assets fall in value, it aids the Fed’s fight against inflation. Bitcoin, as a worldwide reserve asset, might be a big winner in that scenario”.
Swings like this are to be expected for long-term crypto investors who use a buy-and-hold strategy. According to Humphrey Yang, a personal finance expert, big dips are nothing to be concerned about, and he avoids reviewing his own accounts during dangerous market dips.
“I’ve gone through the 2017 cycle, too”, Yang says, referring to the 2017 “crypto crash”, in which many major cryptocurrencies, including Bitcoin, lost a significant amount of value.
“I’m aware that these things are quite volatile, and that they can drop by as much as 80% on any given day”.
Cryptocurrency investments should make up less than 5% of your whole investing portfolio, according to experts.
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