The price of Bitcoin tumbled as much as 17% on Monday’s trading, dipping below $48,000. The dip came after the cryptocurrency hit an all-time high of $58,000. It was a 100% gain on a year-to-date basis. Just a few days before that, Bitcoin had managed to hit a market capitalization of $1 trillion. The last few days are the clearest sign yet of how rapid the rise of Bitcoin has been.
Even though some believe that the crypto is still in a bubble and that eventually it will burst, it seems like of late the digital currency has been on the up and up. But the volatility of Bitcoin isn’t something you can ignore.
In 2017, for example, the value of Bitcoin plunged 45% a few days after it had hit an all-time high then. This isn’t to say that this time around prices will collapse, but it’s very unlikely they will remain this high. A market correction will come no doubt. The question is how soon? The wild swings associated with Bitcoin can get any investor worried.
It’s probably the only financial asset that can swing up and down by 45% or more in just a few days. This kind of uncertainty is always a big problem but even then, you can’t ignore the fact that Bitcoin is edging to massive values at a time where many financial assets are tumbling. Besides, the rise in prices isn’t the only positive news for Bitcoin.
Just recently, the cryptocurrency gained new institutional endorsement after Tesla, MasterCard, and a host of other companies announced they were going to support the currency. Recent reports show that Tesla may have made a profit of nearly $1 billion after buying $1.5 billion worth of Bitcoins.
Tesla’s CEO Elon Musk has been one of the more notable backers of Bitcoin. However, even Musk himself did acknowledge that the prices we are seeing now are a bit out of the ordinary. But Bitcoin bulls still feel that the best is yet to come.
Even with its wild swings, the bulls believe that Bitcoin will hit $250,000 in value over the next three years. There’s also a chance that institutional investors may start coming into the fold. This will help improve the credibility of this coin further. But with increasing prices, we may also start to see increased regulation on Bitcoin trading.
Many regulators have already tried to slap restrictions on Bitcoin and it has surged nonetheless. But the moment you start talking about $250,000 in value for a single Bitcoin, then there will be a lot of raised eyebrows, including those from governments and related government agencies.
But despite all this, it seems to be a good time to be a Bitcoin investor. Even though the price has dipped 17%, it's still way higher than it was a year ago and it seems to be going up again now.
