The world’s market for cryptocurrency saw a complete sweep of around $200 billion- after bitcoin fell by 20% in the last couple of days. Needless to say, this has caused quite a stir in the financial market, with so much money being held in deficit. The prices of Bitcoin have also gone upwards after they moved to a record high of $42,000 last Friday. This implies that the entire global coin, and not just BTC, has a net worth of $1.07 trillion.
Why Was it necessary For Bitcoin To Pull Back?
Yet, Monday evening saw the value of Bitcoin falling all the way to $31,0000- which means that the value of the cryptocurrency market was about $880 billion. Interestingly, you wouldn’t find many traders who are upset with this event unfolding in the second week of January. Of course, there is a huge amount of money at stake, and several investors could be much happier, but a few experts are of the notion that this slum is a healthy correction. They further stated that it was needed due to the cryptocurrency reaching levels of unsustainability.
Several crypto experts have considered this to be an example of traditional finance which is always afraid of the unknown. Yet, the Bank of America did predict the previous week that this meteoric rise of the cryptocurrency would result in a tech boom- similar to that of the 1990s.
Naeem Aslam, the market analyst at AvaTrade talked about how this drop was definitely one that would be welcomed readily. James Putra, the VP of TradeStation Crypto maintained the same train of thought as he mentioned how it was important for bitcoin to come back after reaching such scary levels.
The beginning of 2020 saw bitcoin reaching sub-zero levels of prices– with it being $3,850 last March, but the impact of COVID-19 was felt here too. The prices slowly went upwards- and soon crossed treacherous levels. And some say this pullback was needed.