SpecialCollapse of Bitcoin and other cryptocurrencies
Indicators showed that the most famous digital currency, “Bitcoin,” will be on the verge of sharp fluctuations following the record levels it reached in recent days by exceeding the $65,000 barrier for the first time in more than two years, and this threatens the profits of traders of this currency, which is classified as the strongest digitally. .
Aside from the hype around newly launched ETFs, Bitcoin bulls are excited about what has historically been a major catalyst for further gains: a “Bitcoin halving” event that will reduce supply and theoretically boost the price of the asset.
The next event is scheduled for April.
While analysts say that Bitcoin’s rises are due to the expected “halving” process, many reports have adopted estimates based on expectations of price correction processes that Bitcoin may witness after the momentum of the expected halving process, which is the biggest event that the digital currency market is awaiting, after the recent event related to funds. circulation, which gave Bitcoin additional momentum.
A report published by Business Insider stated that this event will also reduce the number of coins issued on a daily basis by half, which means that miners will receive half of the issuance prize, hurting their profits amid rising production costs.
He quoted a report from JP Morgan, which stated:
- The consequences of this matter pose a risk to Bitcoin.
- Although production costs have placed a floor on the price of Bitcoin in the past, this floor could be pushed down after the halving.
- Once stabilization occurs after the halving, Bitcoin could fall to as much as $42,000, or 33 percent from the $62,608 level where it traded at the end of last week.
investment funds
However, there are signs that demand for Bitcoin is still far from abating, following the approval of a slew of ETFs that have increased access to the cryptocurrency.
In another sign that the Bitcoin ETF craze is still here, Merrill and Wells Fargo began offering their own versions to clients this week as adoption and legitimacy spread further.
Usual fluctuations
For his part, the senior financial markets analyst at the Equity Group, Ahmed Azzam, commented in statements to the “Eqtisad Sky News Arabia” website, saying: “We are accustomed to the significant fluctuations in the price of Bitcoin. The expectation of a 30 percent decline may appear to be significant, but Bitcoin is as it has shown historically.” “Able to move even larger than those expectations, especially since Bitcoin after the reward halving event was heading to decline in a corrective manner and then record higher price increases.”
Azzam added: The Bitcoin reward halving this time may be an event that bulls in the digital currency community have been waiting for, especially since its timing in April comes with the hype around newly launched ETFs.
Azzam considered that the halving event was positive for the asset price in the long term for several reasons:
- Reduces supply.
- Theoretically boosts the price of the asset.
- The event will also halve the number of bitcoins issued on a daily basis, meaning miners will receive half the mining reward, hurting their profits amid higher production costs.
Azzam added that this will certainly have both negative and positive effects:
- Negative: Individual miners who are unable to bear the high cost of Bitcoin mining exit as their reward decreases.
- The positive impact on the Bitcoin price later will be significant, as the high cost of producing Bitcoin after the halving event will be at a level that will push investors to buy higher than it.
Azzam continued: The cost of Bitcoin mining currently exceeds 20 thousand, and these were clear price support levels for the price of the asset. After the next event, the cost may reach 40 thousand, which gives an indication that these may be levels that we take into account as strong price support.
The senior financial markets analyst at Equity Group continued: “It is clear that mass institutional adoption has begun to surface in the digital currency community recently, and there are indications that the demand for Bitcoin is still far from declining and declining, after the approval of a large group of investment funds.” “circulated.”
Azzam continued: “Last week, BlackRock’s Bitcoin exchange-traded fund received inflows worth $520 million in one day, which is the second largest inflow in history for an American fund.”
Expected high
He pointed out that Micro Strategy increased its Bitcoin holdings by 3,000 Bitcoin, and that this gives signals that demand is still at its best and may lead to believe that Bitcoin is capable of continuing its upward journey towards its historical levels to 68 thousand, and it may also record levels of 75 thousand if Trading remained stable above 68,000 levels in weekly trading before price corrections began.
The senior financial markets analyst at the Equity Group concluded his talk with the “Eqtisad Sky News Arabia” website, saying: “Therefore, I may not agree with JP Morgan’s prediction at first. There may not be a deep price correction in the current period, and the price of Bitcoin may exceed the levels recorded last February.” “.
The cryptocurrency Bitcoin rose to its highest level in two years, exceeding the threshold of $65,000, on Monday, due to an influx of funds into its exchange-traded funds in the United States.
The price reached its highest level in the session at $65.537 during early trading in Europe, after having already recorded the highest level in two years during Asian trading. In the latest trading, Bitcoin recorded a four percent increase at $65,045.
The largest cryptocurrency recorded its highest level of $68,999.99 in November 2021.
It has risen in market value by 50 percent this year, and most of the rise has come in the past few weeks with increased inflows into US-listed Bitcoin funds that were launched earlier this year.
#Cryptocurrencies
#Bitcoin
2024-03-04 19:17:34
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