Bitcoin surged over $ 60,000 in early March but has fallen sharply since then
Given Ruvic / Reuters
- Bitcoin price fell 6% on Thursday morning to around $ 53,000, well below recent record highs.
- The ether price fell as did Binance Coins, Polkadot, Cardanos ADA and Ripple’s XRP.
- Analysts said the expiration of more than $ 5 billion worth of Bitcoin options contracts could lead to volatility.
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Bitcoin price fell 6.2% to $ 52,975 on Wednesday as retail rates eased and the options market sparked volatility.
Bitcoin (BTC) was around 14% below the record high of nearly $ 62,000 that was hit in early March. However, last year it was still up 690%.
Ether (ETH), the second largest cryptocurrency, was also down 6% to $ 1,614. Binance coin, polkadot, Cardano’s ADA tokens and XRP fell between 3% and 13%.
Analysts suggested that a major reason Bitcoin’s decline was the more than $ 5 billion in options that expire on Friday, adding to volatility when investors close their positions.
Options are contracts that allow investors to bet on which direction the price will go without having to trade the digital currency itself.
The termination of contracts and some investors trying to lower the price to make money on their bets against Bitcoin in the options market “put pressure on selling until the end of the quarter,” said Shane Ai, director of research and development at Crypto Exchange Bybit. said insider.
He also said that Tesla’s announcement had started accepting Bitcoin as a means of payment – causing the price of Bitcoin to surpass $ 57,000 – which had prompted some investors to sell their coins and make a profit.
After Bitcoin’s meteoric rise, more and more investors are predicting a decline to a lower level.
BlockTower Capital founder Ari Paul tweeted that Bitcoin, which goes back to around $ 40,000, “is plausible and I’ll likely buy there”. He said there were “too many people positioned to go upstairs right away”.
Bobby Lee, founder of the BTCC crypto exchange, told CNBC that bitcoin could hit $ 300,000 before the “bubble” bursts. “People should be aware that from its all-time high it could lose as much as 80% to 90% of its value,” he said.
Justin d’Anethan, head of stock market sales at Nasdaq-listed crypto firm Diginex, told Insider the recent stock market sell-off has likely expanded to include cryptocurrencies.
“Given concerns about the economic recovery, doubts about recent employment data, and rising infection rates, investors appear to have turned some of their stock holdings into cash. Crypto investors likely have done the same thing,” he said.
However, many Bitcoin proponents have pointed to the growing institutional interest as Bitcoin is unlikely to crash like it has in the past. Visa, Morgan Stanley, and JPMorgan are some of the newest big names to get involved.