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After a brutal sell-off that saw bitcoin prices fall below $30,000, they finally rose on Monday, while ether, the world's second-largest cryptocurrency, hit a new all-time high.
Bitcoin has risen more than 7% in the past 24 hours to trade around $34,000, according to CoinDesk, and is expected to recover from sharp losses that wiped out more than $100 billion across the entire crypto market last week. (Source: Coindesk)
Ethereum hit a record high of $1,476 on Monday morning. It has now risen by more than 7% to $1,415.
(Source: Coindesk)
“Given bitcoin’s decline and ether’s stability, we may see investors shift funds into ether as they look for the next crypto asset that will perform well in the current bull run,” David Derhy, an analyst at trading platform eToro, said in emailed comments. “Ethereum’s current rally has given the cold shoulder to skeptics, many of whom were quick to denounce cryptocurrencies when bitcoin recently fell from highs of $40,000,” said Simon Peters, crypto asset analyst at online investment platform eToro. “With a host of logistical improvements to the Ethereum network, an increase in institutional funding, and more developers building on the platform, the future of Ethereum is bright. I believe a price of $2,500 is feasible by the end of the year. However, like all cryptocurrencies, there will be bumps along the road.”
“Bitcoin is going through some consolidation itself after another rally to $30,000,” Craig Erlam, senior market analyst at London-based foreign exchange broker Oanda, wrote in an investor update on Monday. “A move back above $35,000 could start to change the narrative, but the trend in recent weeks is against $35,000 and a move lower seems more likely.”
Buyers appeared to emerge every time prices fell to about $30,000 last week, according to cryptocurrency exchange Kraken. That’s just above the $29,112 level at which bitcoin started the year and has quadrupled in 2020.
“While sharp declines of more than 10% have shaken investor confidence, these moves have been met with strong buying,” cryptocurrency analytics firm Delphi Digital told clients in a note Friday. “Driving out profit-takers and ‘weak hands’ is necessary for Bitcoin to make big strides.”
(Source: Coindesk)
Bitcoin's recent surge to a record high above $40,000 may be irresistible to speculators who have only recently entered the cryptocurrency space, lured by outsized returns in recent years, according to blockchain analytics firm Chainalysis. "New buyer behavior remains the primary source of medium-term price volatility, which is still rising," Philip Gradwell, chief economist at Chainalysis, wrote on Friday. "It is important to reiterate that Bitcoin prices remain at all-time highs."
Ryan Selkis, CEO of digital market analytics firm Messari, wrote that last week’s plunge “looks like a small drop of new buyers, a transfer of wealth from some of the weakest crypto sellers I’ve seen to those with real investment backgrounds.”
Marathon Patent Group Inc. became the latest publicly traded company to snap up bitcoin during the cryptocurrency's wild swings this month. The crypto miner said Monday it bought 4,812.66 bitcoins for a total purchase price of $150 million. The company said the move strengthens its position as a "pure" investment option for those seeking more exposure to bitcoin.
And Bank of Singapore, the private banking arm of OCBC Bank, said cryptocurrencies have the potential to replace gold as a store of value to some extent. But before this can be achieved, cryptocurrencies must overcome obstacles including high volatility, regulatory acceptance and reputational risks, according to a research report from the bank. Mansoor Mohi-uddin, chief economist at Bank of Singapore, wrote. "First, investors need trusted institutions to be able to hold digital currencies safely. Second, liquidity needs to improve significantly to reduce volatility to manageable levels." He said that if these problems can be solved, Bitcoin will have a place in investors' portfolios as a potential safe-haven asset and a means of asset diversification. The benefit of cryptocurrencies is that they are easier to move and store than precious metals, although they are also easily stolen by hackers. However, Mansoor does not think that cryptocurrencies will replace fiat currencies because he believes that cryptocurrencies are an inefficient unit of transaction. "Governments are very wary of any technology that could replace their own currencies. This will reduce the ability of policymakers to print money during economic crises," he added. (FX168))
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