Bitcoin (BTC) has regained its strength after the successive declines of the past week. This Wednesday (03), the cryptocurrency recovered the level of US $ 50 thousand amid reports that Goldman Sachs, one of the main banks and investment managers in the United States, is resuming its negotiations with the digital asset.
Bitcoin exceeds $ 52,000
After strong valuations in the last few days, bitcoin came to be worth US $ 52,636 today, according to the index CoinDesk, its highest price since February 22. That day, the digital currency began to plummet amid mass liquidations, market corrections and statements by multiple public figures, such as Ellon Musk, Janet Yellen and Bill Gates, against crypto.
However, this past Monday (01), the Reuters published exclusive information revealing that the American bank Goldman Sachs is resuming negotiations on bitcoin futures contracts and derivative investments. For institutional investors, this form of investment in digital assets is safer and sought after at a time of many uncertainties about cryptocurrency.
Cryptocurrency had plummeted to $ 43,000
In the last week of February, bitcoin suffered the biggest weekly devaluation in more than a year. The cryptocurrency reached a low of $ 43,113 on Sunday, accumulating a drop of more than 33% compared to the opening price of the 21st.
At the time, Elon Musk had said that the asset price would be too high, while US Treasury Secretary Jannet Yellen warned of the risk that digital currencies pose for allegedly facilitating illicit activities. Even Bill Gates went back to talking about the cryptocurrency, warning investors to “be careful” not to lose money.
Most important news since the Tesla investment
Naeem Aslam, chief market analyst at exchange Avatrade, told the Yahoo! that Goldman Sachs’ re-entry into the crypto market would be “the most significant news since Tesla”. In early February, Elon Musk’s electric car company announced the purchase of $ 1.5 billion in bitcoin.
Since then, other companies like Jack Dorsey’s Square and enterprise software developer MicroStrategy also buy millions in crypto. “We are seeing bitcoin being boosted again,” said Aslam. “There is no doubt that the sentiment is strong among investors and traders who strongly believe (in cryptocurrency).”
Bitcoin is a roller coaster
The biggest digital asset on the market started its upward wave in mid-October 2020. Since then, there has been an appreciation of approximately 400% of bitcoin. But that is definitely not the rule. The cryptocurrency fever has occurred since large companies started to integrate digital currencies into their services, while other financial market whales have started to invest billions in these assets as a form of long-term value and profit reserve.
PayPal started accepting cryptocurrencies in its transactions and even integrated bitcoin buying and selling services in 2020. Then came MicroStrategy, Tesla and many other companies to the sector as important institutional investors who are the main catalysts for crypto prices.
Once this latest wave of bitcoin is understood to be completely out of the curve, it also becomes easier to see how cryptocurrency has been operating at constant highs and lows since its creation. Easily influenced by news and directly determined by market supply and demand, bitcoin demonstrates a certain kind of balance for something so speculative.
In the same period of multiple maximum prices, there were also several records of daily devaluations of the cryptocurrency. The logic of all this is simple, but unpredictable. When euphoria stimulates the purchase of the asset, the numbers soar as the supply falls. Thus, when a new maximum value is reached, mass selling is the next step towards the immediate and short-term profit that virtually no traditional investment can provide. Thus, the cycle continues.
With information: Reuters, Yahoo!