Bitcoin recovered a significant part after the dump and touched the $ 58,000 mark today, but did not gain a foothold higher. Against this backdrop, most major cryptocurrencies have broken the trend and returned to growth.
The first cryptocurrency rose 4.3% on Wednesday. The second cryptocurrency Ethereum not only recovered all its losses, but also reached a new all-time high of $ 4370. Despite a slight decline prior to this, the second largest cryptocurrency recovered and gained about 9% on a 24-hour scale. Another notable achievement is that its market capitalization reached $ 500 billion for the first time.
Why Bitcoin fell below 60 thousand dollars?
Like any other speculative asset, the price of Bitcoin changes from time to time. However, after hitting an all-time high above $ 60K, BTC has seen one of its biggest price adjustments since the start of the year.
The asset’s value plummeted nearly 15%, resulting in a whopping $ 10 billion liquidation across the entire crypto industry within 24 hours.
Several analysts, commentators and journalists have pointed to several unconfirmed reasons for the fall in prices, but it has not been confirmed what exactly led to this correction in the bitcoin price.
While there was some truth to some of these stories, others were downright fake news.
Will Bitcoin Recover?
More recently, there have been concerns that Bitcoin could eventually drop to $ 50,000 in current conditions, paving the way to $ 40,000. However, as we can see, at the moment, BTC is growing and altcoins are recovering.
The volatility of Bitcoin is one of the main reasons many people are reluctant to invest in it. However, its volatility has also played a key role in its success story.
Over the years, we have seen the price of Bitcoin plummet to unimaginable depths, which dealt a huge blow to investors. But it also managed to rise above these levels and get to where he is now.
Hence, it is very likely that Bitcoin could rise again. Even more surprising if it grows to a degree that speculators did not even expect.
But what is driving the high price of this cryptoasset?
Why is Bitcoin so high?
Several factors allowed the cryptocurrency to reach its current level. Let’s take a look at some of them.
– Increased interest from institutional investors. A digital asset considered a safe haven asset from the catastrophic effects of inflation. Armed with this belief, several large institutional investors enter the crypto space and convert their cash reserves into Bitcoin.
The leader in this group of investors is MicroStrategy. Tesla also owns BTC. Even though the company just joined the Bitcoin trend in February, the company is showing optimism about digital assets and other cryptocurrencies.
Hence, with so many large institutional investors joining the cryptocurrency, the pace of adoption is accelerating, thereby driving up the price of Bitcoin.
– The fact that the number of Bitcoins limited is no longer news. It was designed so that there were only 21 million of Bitcoin in total. As more people become aware of the Bitcoin supply limit, this stimulates their demand for it. It leads to a sharp rise in the price of the asset.
Bitcoin trading carries its own risks as investors must be prepared for sporadic price movements, both favorable and unfavorable. Bitcoin is volatile, of course, but it managed to go from useless to one of the most efficient assets within 11 years.
So the question is no longer whether Bitcoin will “return” to normal, but rather “when” it will.