The price of bitcoin briefly fell below $29,000 overnight on Jan. 22 amid strong selling, then bounced back above $32,500 in what observers say is shaping up to be the worst week ever for the world’s No. one cryptocurrency.
The price drop is likely due to widespread profit-taking by U.S. and European investors, according to trading activity on crypto exchange Coinbase, CoinDesk reported.
Bitcoin fell to $29,112 on Coinbase on Thursday — close to the level it reached on Jan. 4 before it started rallying to an all-time high of $41,962.36 four days later on Jan. 8.
Since its recent peak, bitcoin has retreated by at least 20 percent, meeting the commonly accepted definition for a bear market in an asset, Market Watch reported.
Continued selling pushed bitcoin’s year-to-date gains below 1 percent, CoinDesk reported.
Guggenheim Partners Chief Investment Officer Scott Minerd, a recent Wall Street crypto prosthelytizer, told Bloomberg weeks ago that he predicts bitcoin will eventually go to $400,000. But not yet. More recently, he told CNBC that he believes bitcoin may go down to $20,000 after reaching its record high.
“For the time being, we have probably put in a top for bitcoin for the next year or so,” Minerd said.
Hodlers — investors in the crypto community who are in for the long term and “hold” — tend not to focus on short-term moves or crypto news headlines, according to Market Watch.
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However, there’s concern about what the Joe Biden administration could mean for crypto regulation. Earlier this week, Janet Yellen — President Biden’s pick for Treasury Secretary — said she’s concerned about the use of digital assets for money laundering and would consider curtailing them, Market Watch reported.
Social media users couldn’t help but see the absurdity in bitcoin’s whiplash-inducing trajectory. “I love how we made jokes last year saying no-coiners will write articles like ‘#Bitcoin crashes to $30K’, being slightly sarcastic, but here we are. Actually happening. So hilarious.”
Crypto critic and gold bug Peter Schiff has long described bitcoin as “fools gold,” and did so again last week, days after the No. 1 cryptocurrency plunged more than 20 percent from its new all-time high. On Jan. 22, after bitcoin plunged even more, Schiff commented on its so-called scarcity, referring to satoshi — the smallest unit of the bitcoin cryptocurrency. The satoshi-to-bitcoin ratio is 100-million satoshis to one bitcoin.
“The idea that Bitcoin is scarce as there’s only 21 million is nonsense,” Schiff tweeted. “One #Bitcoin merely represents an arbitrary quantity of 100 million Satoshis. So, it’s the total number of Satoshis that must be considered. With a supply of 2.1 quadrillion Satoshis are anything but scarce!”
Another Twitter user challenged Schiff to a bet: “I bet him $50k that #bitcoin has a larger market cap than #gold within 5 years.”
Bitcoin fans were undeterred by the critics. “The powers that be will NEVER stop criticizing #Bitcoin,” a crypto trader tweeted. “They will NEVER stop perpetuating false narratives. They will ALWAYS see it is a threat to their systems. That’s literally why we are here. Revolution.”
Bitcoin was trading at $33,527 as of this writing.
