On Wednesday, Dec. 1, Bitcoin reached the $59,000 mark, which was close to the cryptocurrency's all-time high of $61,500. A record high of $68,000 was reached on November 10th, and since then, the market price has remained around where it was in early October before the surge that lasted through November and early December. Omicron COVID-19, Jerome Powell, and Gary Gensler's views on cryptocurrency regulation all contributed to this month's price volatility and stagnation.
Bitcoin's price has dropped from its all-time high, but it is still up significantly from the low $40,000s of September. Some analysts predict that Bitcoin's price will have grown to well over $100,000 by now. Ethereum's price hit $4,850 only a few minutes after Bitcoin's new all-time high. Ethereum has also had considerable ups and downs since its most recent high. Bitcoins Circuit’s bitcoin software has risen to the status of one of the world's most reputable online investing venues.
As a result of a decision by China's central bank to prohibit the use of virtual currencies, cryptocurrency prices fell early this year. The price of Bitcoin dropped after hitting a high of $52,000 in early September and would not recover above $50,000 again until October.
Despite its usual ups and downs, it's still a long way up from its low of under $30,000 in July. Bitcoin's volatility has been on the full show since it first hit $60,000 in April as more and more people get into the cryptocurrency game. In the months after its July low, Bitcoin's price has steadily risen, and it has recently hit new highs. To anticipate these ups and downs is to expect the volatility of cryptocurrencies in the future.
Investing in this asset class with a high percentage of your portfolio has been discouraged by financial advisors and experts. By interacting with consumers, they can make sure that hazardous crypto investments don't interfere with other financial objectives, such as saving for an emergency or paying off high-interest debts.
Exactly why has Bitcoin recently dropped in value?
There are new worries regarding the country's continuing disagreement with COVID-19, new U.S. government regulatory efforts, and legislation linked to crypto in a new infrastructure bill that has contributed to recent price changes. In an industry as new and mysterious as Bitcoin, it doesn't take much to produce price swings that may have a significant impact. In addition to the present decline, new short-term investors who are selling their Bitcoin in response may also be a factor. Three factors led to the cryptocurrency market collapse that saw Bitcoin fall below $50,000:
1. THE FED
Investors are frightened by speculative assets because of the first weakening in plain vanilla stocks, in part due to the Federal Reserve taper discussion. Famous investor Louis Navellier has warned that the US Federal Reserve's tapering might lead to a collapse in the Bitcoin and crypto bubble.
2. THE COVID
It's no secret that investors are fleeing from the Omicron variant epidemic due to the lack of clarity regarding its scope and the effectiveness of currently available vaccinations.
3. THE HOLIDAYS
It's also a good time of year. As the year draws to a close, many investors are trying to lock in profits and remove funds from the market. Bitcoin is still up 66% year to date, even with the recent declines. (Bitcoin began the year around $29,400.)
For Cryptocurrency Investors, what does this mean?
This volatility in the crypto market may be expected with a long-term investment plan. According to Humphrey Yang, the personal finance expert behind Humphrey Talks, during market downturns, he avoids looking at his own accounts because he doesn't want to be concerned.
According to Yang, the "2017 cycle" refers to the "crypto crash" that occurred in 2017, in which the value of many major cryptocurrencies, including Bitcoin, plummeted. They may drop by as much as 80% on certain days. I'm aware of how volatile these things may be.
Bitcoin investments should not account for more than 5% of your total holdings, according to industry experts. As long as you've done that, according to Token Metrics' principal technical analyst Bill Noble, the ups and downs will keep happening. While there are risks associated with investing in crypto, you may use the same long-term investing technique that you would use for any other long-term investment.