Why is Bitcoin Facing a Downward Trend in its Price?

The world’s major and famous digital currency, Bitcoin, has been going through a losing streak over the past few months after reaching an all-time high of more than $63,000 in the middle of April.

Bitcoin began to fall, reaching $30,000 in June for the first time since the beginning of the year. No surprise, volatility has always been the most significant part of Bitcoin and, for that matter, all cryptocurrency. The Bitcoin price had fallen more than 80% in the year or so after late 2017. This all happened after significant firms such as Fidelity and PayPal having invested millions of dollars in the crypto space. The investments keep growing after thousands of investors join the club.

There are some serious reasons behind the fall of Bitcoin’s price. The seasoned Bitcoin investors must be aware of these Bitcoin’s moves and know how to deal with these ups and downs. But, coming to the Bitcoin-curious who is just a step ahead of investing in Bitcoin should definitely think about their investment strategy – why and what investments should be questioned by themselves.

Bitcoin’s Current Movement

Bitcoin hit its all-time high in the middle of April after Coinbase, one of the biggest crypto exchanges, decided to go public. This cheerful ambiance went on for months together, and enormous developments were happening in the crypto world. Tesla’s announcement that it would accept Bitcoin, financial institutions like BNY Mellon and Fidelity making big deals and providing clients’ access to the crypto funds was just embracing the crypto future. On the other hand, the behemoth payment processor, Mastercard, and the U.S. cryptocurrency exchange, Gemini, together have stepped up the cryptocurrency game and launched the credit card that rewards its users in digital currency. So the users of this card (issued by WebBank) get up to 3% of the purchased value, and the “reward” is deposited in the user’s Gemini account.

On the other hand, in collaboration with BlockFi, Visa has decided to enter the crypto universe with its first credit card supporting a crypto rewards program. As a result, it is bringing new partnerships and new revenues to the table.

Meanwhile, Musk’s sour on the environmental impact due to the high electricity consumption by Bitcoin, there is a sudden strike on the cryptocurrency’s carbon footprint. Well, China seems to be fastening the crypto mining process in many of its regions.

The recent hack that entered into the networks of the Colonial Pipeline Co. renewed Congressional attention to how Bitcoin is used to extort well-heeled corporations.

“Recently, the Federal Reserve didn’t help matters when it signaled in its latest Federal Open Markets Committee meeting that it was interested in raising interest rates a bit sooner than expected to stave off higher-than-desired inflation. These higher borrowing rates make speculative assets less appealing to investors, thereby reducing demand.”

So?

Over the years, Bitcoin gained a lot of traction and took the mainstream path with a secure and easier exchange on crypto platforms. Now, money managers, like the folks at Minneapolis-based money management firm the Leuthold Group, enable a point or two of their portfolio can go to Bitcoin. Although there is high volatility, Bitcoin is still moving at $34,000, which is again the highest price compared to its $11,113 this month last year. This is an excellent development for Bitcoin, which once was alone. This high growth and the clear upward trend is interesting and impressed the investors.

“At some point, the market will figure out the value of crypto and incorporate that information into a high level of price for those assets,” noted economist Tyler Cowen in a Bloomberg column. “From then on, expected rates of return will be—dare I say—normal.”

So, investing in Bitcoin now might not sound like a plan, but you will be able to sell it later on for much more than you brought it for. But your goals should never go easy. It is vital to think thrice about handling the thrill of upward and downward trends in the Bitcoin market.

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Text source: DiamCircle

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