The cryptomarket is on the height of its success for almost the whole week. The leading digital currency, Bitcoin, continuously overcomes record after record. In particular, it surged to an exceptional high, breaking through the level of $ 52,000.
Analysts believe that this price level is not the limit, as the BTC is still sharply rising towards the next highs. The strong volatility of the cryptomarket does not hinder Bitcoin to reach new targets. On Monday, this cryptocurrency slightly pulled back after breaking through the psychologically significant level of $ 50,000. However, it immediately took revenge by moving up to $ 51,000. The series of records continues at the moment.
On the morning of February 18, Bitcoin traded in a wide range of $ 52,190 - $ 52,225, which showed the volatility of the crypto market. It can be recalled that Bitcoin's price surpassed the level of $ 52,000 on Wednesday amid the news from the supplier of Microstrategy. The company is ready to increase the issue of convertible notes from $600 million to $900 million, and also plans to invest an additional $150 million. It was reported that Microstrategy will use the proceeds from the sale to purchase the first cryptocurrency.
Another factor that contributes to Bitcoin's growth is the interest of BlackRock in it. The company, which manages $ 8.7 trillion in assets, is potentially ready to invest in the leading digital coin. According to Rick Rieder, BlackRock's Director, two of their funds were invested in BTC futures earlier this year. BlackRock believes that as part of its investment scheme, the company can use existing financial instruments along with Bitcoin.
Bitcoin's rapid growth excites the analysts, who give us various versions of what is happening. Moreover, supporters of cryptocurrencies are sure that the leading digital asset is at the start of an upward trajectory in terms of capitalization. According to experts, the current situation is very different from the previous growth of BTC at the end of 2017, when it reached $ 20,000 and then plunged. So, they associate its current growth with two most important factors: the recession of the global economy due to COVID-19 and the rising interest of large investors in cryptocurrencies. It should be noted that the government agencies, recognizing cryptocurrency assets, also have a vital role.
At the same time, the debate over the possibility of Bitcoin to replace gold does not subside. However, opponents of this version put forward their arguments. They believe that BTC is not suitable for saving capital, and even more so as a "safe haven" asset due to its strong volatility. In turn, Bitcoin's supporters appeal that digital currencies, like fiat and precious metals, can set new records, even when gold declines amid a rising US dollar. Thus, it is not surprising that many people call Bitcoin "digital gold" and their attitude towards it is shifting. In 2017, market participants considered this digital asset a means of manipulation and a pathetic attempt to oust fiat currencies, but now, the situation has changed.
Most institutional investors have revised their approach to Bitcoin and virtual assets. For example, Ray Dalio, a major investor, billionaire and founder of the hedge fund Bridgewater Associates, previously considered BTC an ineffective accumulation tool due to its off-scale volatility. However, his opinion dramatically changed at the end of January 2021. The entrepreneur said that he is glad with how Bitcoin has stood the test of the last 10 years. However, he still claims that it is highly volatile and warns investors about the probability of losing up to 80% of their investments.
Many experts, including JPMorgan analysts, are worried that BTC will not be able to hold its reached positions.This is because it is difficult for Bitcoin to maintain a record price level due to the growing volatility and general instability of the crypto market. The bank recalled that the capitalization of the first cryptocurrency has grown by $ 700 billion since September 2020. Experts attribute this dynamic to an increase in the number of retail investors and traders, although institutional investors was the leader in this matter.
Some experts think that it is necessary for Bitcoin to make a correction due to its non-stop growth. Such a kind of reset will allow the digital asset to reach a new level. At the same time, when the value of BTC rises, its momentum slows down, which shows the weakness of the upward trend. Thus, experts consider this a signal for a potential pullback of a digital asset, since its current indicator points to its overboughtness.
