October 29, 2018 02:34:40
Bitcoin Holds Its Price
The king of cryptocurrencies, Bitcoin (BTC) has had a stable week, holding its price right around the $6500 level. At the same time, the US stock markets took a plunge – a stark contrast to Bitcoin’s uncharacteristic lack of volatility. At the time of writing, the price of the crypto-asset is hovering around $6478, marginally down by 0.83% over the last 7 days, according to CoinMarketCap.
US stock markets, on the other hand, saw wild price swings and sell-offs during the same period. The Dow Jones Industrial Average ended the roller coaster week with a 3% loss. CNBC reports that after plummeting on Wednesday, the Dow went up by 500 points on Thursday only to drop more than 500 points on Friday before recovering some of that drop.
Bitcoin isn’t the only cryptocurrency holding steady. Other top crypto assets like Ether (ETH) and Ripple (XRP) have also held their price over the past week.
Equity Market Meltdown
The stock markets have had a terrible month due to fears of the escalating trade war with China and the rising interest rates in the US. Earlier in October, when Dow dropped by 1,300 points in two days, the panic spread to the crypto market as well. Bitcoin experienced a drop of 6% while around $18 billion were wiped off from the overall cryptocurrency market.
For an asset that is known for its volatility, the unusual calm behavior exhibited by Bitcoin this week is seen by many as an indication that it is maturing.
Has Bitcoin Bottomed Out?
After climbing to an all-time high of $20,000 in December 2017, Bitcoin had plunged by 33% in two days with prices diving from above $9000 to below $6000 in early February this year.
Bitcoin has seen a correction of 67% over the year. Brian Kelly, CEO, and founder of BKCM believes that cryptocurrency investors are mostly insulated from what’s happening in other markets.
“I don’t know of anyone saying, ‘Microsoft dropped, I better sell bitcoin to cover my margin,'” Kelly is reported to have told CNBC.
It is believed by market observers that the exponential rally last year was due to speculative buying by retail investors, most of whom seem to have exited the market during the downturn.
Institutional investors who have mostly shied away from the digital asset markets till now due to fears arising from hacking incidents and lack of regulations are now expected to move in gradually.
The launch of custodian services for institutional investors by firms like Fidelity and the upcoming launch of Bakkt, a regulated cryptocurrency exchange owned by ICE, the parent company of the NYSE, might just be the catalysts required for smart money to make its way to the crypto markets.
- Bitseven.com -