Bitcoin Reaches $10K Again Since February Pre-Halving
Since mid-March, Bitcoin (BTC) has gained double in price. As a result, it joined a broader rally in global equities since getting swayed by coronavirus-related volatility. This damaged economic growth, consumption activity, and corporate earnings.
Also, the world’s famous cryptocurrency rallied back over $10,000. And this happened ahead of a technical event seen by several as having driven the price higher recently.
On Friday, Bitcoin increased to as high as 2.7% to a high of $10,070 in Asia trading. Then, it shortly took it into five figures again since February 24. And it was holding below the level at $9,974 at 10:25 a.m. in Hong Kong.
And all of these happened before the upcoming halving – where the rewards miners will get for processing transactions will be chop in half as soon as May 12. This intentional move of Bitcoin made to control inflation.
Blockchain investment and advisory firm Kenetic Capital’s managing partner Jehan Chu stated, “Bitcoin trades sentiment-driven at its peak and valleys. The post-halving hangover is part of the normal price ebbs and flows on top of Bitcoin’s fundamental value.”
In addition to that, Singapore-based crypto exchange Luno’s head of business development Vijay Ayyar explained that the market became bullish since March lows. And this has become across asset classes, including crypto. Also, the money-printing of the Fed and other central banks worldwide have made a lot of confidence to investors. They currently think that the economy will experience support no matter the circumstances.
The Peak and Volatility
Tudor Investment Corp.’s founder and chief executive, Paul Tudor Jones, purchased Bitcoin as a hedge against inflation. That he sees being stoked by enormous fiscal spending and bond-buying by central banks to fight the pandemic. Previously, he dabbled in Bitcoin in 2017, doubling Jones’s money before leaving the trade near its peak at almost $20,000.
Chu noted that BTC might see sub-$10,000 levels post-halving. However, the boost in institutional interest from investors such as Jones is undeniable validation for Bitcoin.
Moreover, while BTC is notably volatile during the past years and crashed unexpectedly following its peak near $20,000 in December 2017, it has gradually been making inroads. Also, regulated exchanges slowly offered a lot in the way of products such as futures and options around the asset. And institutional interest has been building up.
Aside from that, cryptocurrencies still have their fair share of skeptics, from Warren Buffet to Nouriel Roubini. According to data last month from PricewaterhouseCoopers LLP, the industry struggled to lure mainstream investment in the past year. This is a result of global fundraising and deals drying up. And these include a 76% collapse in M&A value to $451 million from nearly $1.9 billion a year before.
Then, Stack Am Pte.’s Head of Research Lennard Neo said that as Bitcoin halving arrives, they think a short-term pullback might happen immediately post-halving. And this is because traders will start to take profits.
Then for the longer term, Neo explained that people could expect to see Bitcoin register significant price appreciation by the end of 2020 and early 2021.
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