Bitcoin (BTC) reached an all-time high of around $USD 67,000 only a week ago. On the other hand, investors have begun to ditch the world’s most valuable cryptocurrency in favor of the new kid – or, more correctly, a new in town: the Shiba Inu.
On Wednesday, the price of one BTC plunged more than 5% and was trading around US$59,000, 12% lower than last week’s record high.
A steep decrease in such a short time would be called a market correction for any other asset. It’s just business as usual for BTC. Bitcoin’s volatility has become common knowledge among cryptocurrency speculators.
Even though CoinMarketCap lists over 13,000 cryptocurrencies, ranging from dogecoin and Shiba Inu to more obscure tokens with even more ridiculous names, such as Elon’s Marvin, Dogelon Mars, Baby Floki Billionaire, and Kitty Inu, bitcoin remains the dominant digital currency.
The entire market value of BTCs now in circulation is US$1.1 trillion ($1.47 trillion). That’s roughly half the size of the whole cryptocurrency market, which is worth $2.47 trillion.
Ethereum
Ethereum, the Pepsi to bitcoin’s Coke, is worth approximately $475 billion ($632 billion). All other cryptocurrencies are much less valuable than BTC and ether.
That is unlikely to change anytime soon, especially with the introduction of bitcoin exchange-traded funds.
The ProShares Bitcoin Strategy ETF began trading last week, followed by the Valkyrie Bitcoin Strategy ETF shortly after.
The ProShares ETF now manages more than US$1.2 billion ($1.6 billion) in assets. The growing popularity of bitcoin ETFs, which follow bitcoin futures rather than giving individual investors ownership of actual bitcoins, should drive up the price of bitcoin in the long run.
Some cryptocurrency analysts believe that bitcoin prices could reach $100,000 ($133,190) by the end of this year or early in 2022.
Aside from more typical people purchasing bitcoin ETFs, numerous notable institutional investors, including Paul Tudor Jones and George Soros, have also purchased BTC.
Other bitcoin proponents expect even higher price targets. According to venture entrepreneur Tim Draper, BTC might reach $250,000 ($332,976) by the end of next year.
Brokerage Firm Robinhood
However, there are indications that some traders are losing faith in BTC and other cryptocurrencies. An asset’s price cannot continue to rise at such a rapid pace indefinitely.
Even with this week’s decline, BTC prices have more than doubled this year.
In its most recent financial report, Brokerage business Robinhood reported that crypto activity fell from record highs in the previous quarter. Moreover, revenue was lower in the third quarter of 2021 compared to the second quarter.
Additional corrections and bear markets are unavoidable. The wild swings in bitcoin values over the last few days may only be the beginning.
COMMENTS