Vienna. Friday night was nerve-wracking even for die-hard Bitcoin investors. At two o'clock in the morning, the price of the oldest and most important cryptocurrency rattled at times to $ 29,000 before recovering a little. On Thursday morning, a unit had cost 35,000 euros. As always after such crashes, reasons were sought. Some market participants said that fear of stricter regulation under US President Joe Biden has caused Bitcoin to tumble.
Janet Yellen, who will head the Treasury, is said to have expressed skepticism about Bitcoin and said that it could be used for criminal activities. On the other hand, the new head of the US Securities and Exchange Commission, Gary Gensler, is said to be more open to cryptocurrencies than his predecessor.
First down, then up?
The fact is that sharp fluctuations in the price of Bitcoin are not uncommon. Two weeks ago, the price had climbed to over $ 42,000 after breaking the $ 20,000 mark for the first time in December. Numerous analysts and crypto experts are now issuing six-digit price targets, including renowned financial institutions such as JP Morgan Chase. However, the bank emphasized that the price target was only “medium-term”. Until then, Bitcoin is likely to fluctuate violently several times. It most recently fell 80 percent in 2018 after hitting the $ 20,000 mark in late 2017. Many investors have this in mind, which is why they sometimes react violently when Bitcoin threatens to crash, which accelerates any decline – triggered by profit-taking.
Bitcoin is seen primarily as a store of value as it is capped at 21 million. Critics believe that something that fluctuates so violently cannot be a store of value. Fans counter that the cryptocurrency is still in a pricing phase. It is also still a small market in which a few big players can make a big difference.
