Another record was posted on the second day of the new year. On January 2, bitcoin was worth $ 30,000 and it didn’t stop there. A day later, the counter pointed to $ 34,000.
The price of the crypto coin has been on the rise since autumn. Analysts pointed out the increased popularity with large investors.
Bitcoinbubbel
For example, asset manager Fidelity announced the launch of a bitcoin mutual fund. Yet a statement is that several tech companies, such as Square Inc, have turned some of their cash reserves into bitcoin.
It is unclear why the currency is now suddenly deteriorating so much. Several experts have already warned against the ‘too strong’ price increase in recent days and the chance of the bitcoin bubble bursting.
ING economist Teunis Brosens can also only partly explain this. According to him, the market is extra volatile, because only a small part of the bitcoins is traded.
–
–
Lost access code
“Some of the owners are on the coin, they don’t sell. Some cannot be traded because the private keys, the numerical code that owners use to gain access, have been lost,” he says.
So those coins will never move again. And then there is still a lot of speculation that the founders own and hold some of the coins themselves, Brosens explains.
20 percent but traded
It is estimated that only 20 percent of the cryptocurrency is traded. “That means that relatively small transactions have a huge influence on the price,” says the ING economist. Demand only needs to increase a little to send the price completely through the roof.
Bitcoin is still worth much more than in the previous free fall in March 2020, when the rate fell below $ 5000. “With cryptocurrency it is always difficult to say what explains the rise or fall. We have also regularly seen that tens of percent increase or decrease in a day,” says Brosens.
–
–
Manipulation
Regulators are active in the normal money market. This is not yet the case with bitcoin. As a result, the market can be highly manipulated, Brosens knows. “I don’t know if that is the case now. But you cannot rule out that whales are busy and dump the coin.”
Whales are holders of very large amounts of bitcoins. There are currently about 1,900 investors who can be placed under this category.
–
–