Speak to anyone who spends time reading into cryptocurrency, and they will tell you that the markets are pretty volatile. Indeed, one only has to look at the skyrocketing price of Bitcoin (BTC) in 2021. The cryptocurrency reached a value of around $70,000 per BTC, which was a massive increase. However, as markets begin to calm down a little in the face of the world beginning to return to at least a semblance of normality, the BTC market has transformed again.
Indeed, after hitting the $70k mark last year, BTC has seen its value drop back down to around $40,000 at the time of writing. That is a big drop, though it is also a minor increase after falling to a relative low of $35,000 in February. The massive drop-off, though, is unlikely to rebound entirely back to the massive rates being seen last year. This comes down to various factors.
The two most important reasons being given at the moment include the fear of extra regulation coming into the market. Many people buy into cryptocurrency as they see it as a less regulated financial market than more typical alternatives. However, with a waft of regulation expected to hit the market in the coming months and years, some are worried that the utopian ideals are going to be quickly overwrote.
One common reason also is that the COVID pandemic is, in some places, beginning to draw to a close. This means that many pandemic stimulus packages that were being granted are no longer anywhere near as present. As such, it means that many people who used these measures to finally give cryptocurrency a try will begin to pull their money out without the stimulus support.
Is Bitcoin expected to rebound?
As arguably the largest name in cryptocurrency, BTC is seen as among the most stable of the coins out there. Other coins, though, are seen as utterly volatile and might be unlikely to find a solid floor. With BTC, the floor has been pretty high for a cryptocurrency. The ceiling is most likely to move with Bitcoin, but the floor price is likely to stick in at a decent-sized five-figure amount.
However, platforms such as Estimated.pro – which offers market reviews and price predictions – believed a 3% drop in price will come in the week to come. They provide some very interesting predictions on the matters at hand, and they are relatively bullish about the future of BTC. Indeed, they noted an 8% increase in early-to-mid March.
Those who are worried about the changing landscape of the market, then, might wish to keep a closer eye on these figures in the weeks to come. With more volatility expected in the near future, too, those who are hoping for a serene market might be waiting a long time.
The financial world is in relative flux at the moment, and it should come as no surprise that BTC and other cryptocurrencies are feeling the impact. For now, though, it looks like Bitcoin might stay in this period of peaks and troughs as the market looks to balance itself out after such a significant change in circumstances. Add in fears over regulation, too, and the market inconsistency starts to make more meaningful sense.