Bitcoin hype has been fully exploited and is rapidly replacing gold

Bitcoin’s price has once again risen above $50,000, and it is undeniable that some of the momentum that Bitcoin had at the beginning of the year has been lost. Lower volatility may also indicate that the dividend period gained through network hype has passed.

Some people believe that the price trend of Bitcoin will not see a sharp correction in the short term, but may instead remain sideways for a longer period of time, which will be a "healthy" performance, and then it will launch an impact on new historical highs.

Unprecedented money printing to finance stimulus packages has made hyperinflation a reality, but it has undoubtedly turned the world's attention to Bitcoin. Amid the ongoing hyperinflation, a constant amount of Bitcoin has taken center stage in the financial world.

While the money supply has expanded exponentially, the cryptocurrency’s supply is still capped at just 21 million BTC, which has caused the price of each coin to soar from $4,000 less than a year ago to a peak of $58,000 today.

This upward trend has reignited interest in cryptocurrencies overall, however, based on shrinking volatility, the “hype craze” may be coming to an end.

Sideways price action ‘healthier’ before new bull market highs

Arcane Research’s latest market report draws attention to the fact that Bitcoin’s volatility – a characteristic for which it is widely known – peaked in February as prices hit highs.

Bitcoin volatility has since subsided, which the report said “may indicate that the peak of the ‘hype-driven’ Bitcoin rally has passed.”

Crypto fever appears to have cooled after Elon Musk said Bitcoin appeared overvalued when its market value surpassed $1 trillion for the first time.

The dollar is also beginning to awaken, and stock markets are showing signs of weakness, which could put cryptocurrencies at risk of a downside. But the report says an economic downturn is not necessarily imminent. Instead, Arcane Research revisits 2017, before the final push at the peak of the bull market began.

“Bitcoin has been trading sideways for nearly half of the 2017 bull run, which is only healthy until new highs are set,” the report reads.

If history repeats itself, the current sideways price action could continue for longer and a parabolic trading range could precede a parabolic advance.

Indicators show Bitcoin is gaining pace in replacing gold in investor portfolios

Bitcoin, the dominant cryptocurrency, is rapidly emerging as the new digital gold, according to a report published this week by Bloomberg Intelligence. This is evident from a chart showing the performance of the two assets, with Bitcoin significantly outperforming the metal.

Over the years, Bitcoin has gained increasing recognition as investors flock to digital assets. A report published by Bloomberg in March 2021 stated: "Bitcoin will transform from a speculative risk asset to a global digital store of value in 2021."

As of last month, the price of Bitcoin was $45,000, and the cryptocurrency has since surpassed $54,000 in March as of this writing. For reference, the price of gold was around $1,859 per ounce at the beginning of last month and has now fallen to $1,700 per ounce.

The Bloomberg report speculates that the cryptocurrency remains within the $40,000 to $60,000 threshold, and is likely to attract responsive buyers at $40,000, while increasing demand over time with limited supply is bound to affect the yuan's value soaring to $100,000 in 2021.

Recent developments have confirmed the possibility of this prediction, as Tesla, the world's largest automaker by market value, has shown increasing interest in digital asset reserves, MicroStrategy has expressed support for Bitcoin, Square has mentioned Bitcoin sales as its main source of revenue over the past year, Meitu has purchased $40 million worth of Bitcoin and Ethereum has become a hot topic. The interests of these business giants are able to influence the rise in cryptocurrency prices and promote their acceptance in the global market, while gold is rapidly becoming a weaker competitor.

Fears of inflation have driven most assets, including stocks, lower over the past week. Despite this, Bitcoin and other cryptocurrencies have remained stable — strangely sideways.

Last month, U.S. Treasury Secretary Janet Yellen supported the idea of ​​digital dollar research at a New York Times conference, over the views of her predecessor, Steve Mnuchin. Citigroup and other investment banking giants have pointed to the potential replacement of Bitcoin and said that Bitcoin could become the "currency of choice."

On the other hand, the metal lords are constantly being hit by rising interest rates in the United States and struggling prices in the Indian market. With this in mind, it is not unreasonable to predict that Bitcoin may take over the global market and overthrow the tyranny of the metal kings.