After beginning the new year on a record high, BTC has shown volatility in its prices, with sharp drops in the recent days.
- During last week, there was a price drop of almost up to (BTC) price lost 12%.
- The famous multinational investment bank, UBS gave out a warning on the underlying risks associated with several different high profile digital currencies in the long term.
- Investors and traders of the crypto market in the United States have become increasingly skeptical more recently.
- BlackRock, one of the leading investment management company in the U.S. has revealed its intentions of entering the BTC community very soon
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Price Volatility with Some Selling Sessions
On Monday, January 25 at 08:45 SGT, the trading value of Bitcoin (BTC) was $32,631. There was an increase of 2.2% in its value. The market saw BTC recovering from a price drop of down to US$31,194, just five hours ago.
The market witnessed a very sharp descent in the bitcoin price last week, which was almost equal to 12%. This was the steepest fall in the price since September last year. This caused clouds of fear and uncertainty in the crypto market for investors and traders, who have started to believe that the price rally of the BTC might come to an end very soon.
Bitcoin was seen climbing up to the level of $32,000 on last Friday (January 22) for a short instance, after witnessing fluctuating prices for the previous two days. According to a few reports from Bloomberg, analysts indicated that a consistent fall below the level of $30,000 might suggest further losses for the investors in the market.
The price of BTC revolved close to 30% beneath its record high of the year. All sorts of investors have been gaining profits right before the Chinese New Year holidays in Asia, reports reveal.
Another key event which affected the price trends and influenced them to go down was a statement from Janet Yellen, who shared her opinion that the virtual currencies were a key interest for the terrorists and the criminals.
It is important to make sure that crimes such as money laundering are not facilitated via these channels, stated Yellen, who will be heading the Treasury Department of the United States, under the newly elected President, Joe Biden.
On the other hand, however, Blackrock, one of the leading investment management companies of the U.S., revealed its intention of integrating BTC futures as a proper source of investment into two of its funds.
Contrary to the more pessimistic participants of the digital currency market, some of the more optimistic and confident traders and investors in the market, believe, and are hopeful that the market will witness a further surge in the price of Bitcoin.
They believe that this is also due to the fact that an increasing number of investors have been diversifying their portfolios by putting off the gold holdings, and incorporating digital currencies such as the Bitcoin instead.
Why is there an increasing skepticism in the market for BTC?
Several asset management corporations and other financial institutions like UBS, a famous multinational investment bank, alarmed its clients regarding the fall in prices and values of major digital currencies such as the BTC very soon. They recommended their clients to only invest an amount in the crypto market, which they can bear to lose.
The Swiss Asset management firm said that although there’s a chance that there might be price rises in the near future for these digital currencies, there will most likely also be long term risks associated with these cryptocurrencies, including regulatory controls and competition.
The analysts and strategists believe that, although chances are usually slim, there might be times where the prices may suddenly collapse for a particular crypto, rendering it useless and obsolete. In such cases, they believe, there is not much an investor or trader can do, besides regretting or seeing their wealth turn into ashes.
There is also an increased uncertainty and doubt in the minds of the individual investors. Research and survey data reveals that only up to 17% of individual investors expect the price uptrend of the bitcoin to continue, according to the sentiment survey of the latest American Association of Individual Investors (AAll). A majority of the investors and market participants believe that the rise in the prices of BTC and its rallies are temporary, and that the bubble will most likely crash sooner or later.
A Final Word
There have been mixed price actions on the charts of the crypto market during the last week, and while some investors are still continuing to remain confident and optimistic, a majority is now becoming increasingly doubtful and uncertain of the lucrativeness in the crypto market investments.