Bitcoin has now nearly halved in value since its all-time high of $69,000 last November.
While stock markets around the world went through a sharp correction last week, the world’s largest crypto Bitcoin moved simultaneously, first falling below the crucial $40,000, before falling to $35,000.
The second largest cryptocurrency – Ethereum – fell even more sharply.
Rising interest rates have prompted investors to write off their positions in riskier assets such as cryptos.
Meanwhile, reports of the Russian government’s plans to ban the use and mining of cryptocurrencies added to the already volatile sentiment. Russia is the third largest bitcoin mining region in the world.
Bitcoin has now nearly halved in value since its all-time high of $69,000 last November.
The big question remains… What’s next for Bitcoin?
To understand what our readers are thinking, we ran a poll on Equitymaster’s Telegram Channel this weekend.
Here’s what we asked our readers…
What’s your take on where Bitcoin’s price will be in 1 month?
• Up to 50?
• More or less unchanged?
• 50 down?
With a response from 407 participants, here’s what we found:
About 22% think the price of Bitcoin will rise 50% from current levels and return to near its all-time high within a month.
That’s quite an optimistic view. But since Bitcoin prices have risen or crashed more than 50% countless times, anything is possible.
If there is one word that describes Bitcoin, it is fleeting. You must have seen crypto prices rise many times and then crash almost as quickly as rumors and sentiment are quickly factored in.
To proceed…
About 37% of people voted that Bitcoin’s price will be more or less unchanged in a month’s time.
Meanwhile, participants with a 41% majority predicted that the price of Bitcoin will crash more. And that too by 50%!
Talk about pessimism.
Now that the regulator is cracking down on cryptos (the US has also joined China on certain aspects), all scenarios are well in play.
The scenario in which the price of Bitcoin will crash 50% more reinforces Taleb’s view that declining assets have little value.
Nassim Taleb is known for Fooled by Randomness, The Black Swan and Antifragile, a bestselling series about the nature of complexity, randomness and a world where rare events dominate the landscape.
This is what Taleb says,
For a contagion-driven asset with no economic anchor like bitcoin, a falling price doesn’t make it “cheaper” and more attractive. A falling price makes it less desirable and, paradoxically, more expensive.
Why? Because price is the ONLY information.
Note that while cryptos are known for their volatility, the recent trend of sharp declines is becoming a concern for investors. Even after buying the dip, he continues to dip more.
Although it is not surprising for hardcore crypto holders who have made a lot of money. Because in 2021 almost every top crypto has delivered huge profits.
So can we expect the same trend to repeat itself in 2022? Will there be any stability in crypto markets? Time will tell.
Equitymaster’s take on cryptos is simple.
We don’t get cryptos to be honest.
It’s something that captures our imagination, but we just can’t find a way to appreciate it. Basically speaking.
Chartists love our own Brijesh, studying prices and suggesting different levels. That makes sense to us.
That said, our “fundamental” view of cryptos is simple…
It is in line with the approach everyone should take when entering a space they do not understand.
Only invest what you can afford to lose. Nothing anymore.
Disclaimer: This article is for informational purposes only. It is not a stock recommendation and should not be treated as such.
(This article is from Equitymaster.com)
(This story was not edited by DailyExpertNews staff and was generated automatically from a syndicated feed.)
