While the investors are busy judging the fair value of digitized investments, comparison between Bitcoin and other high-value assets has triggered a debate about the future, and vulnerability of cryptocurrency.
There was a steep 179% decline in the value of Bitcoin, last week. It followed only after Bitcoin had sustained a peak value for more than 200 days.
The director of research at FBB Capital Partners, Mike Baily surrendered by announcing, he can’t get involved in this kind of technical stuff because it’s too expensive.
However, as of Monday, Bitcoin fell as much as 20% following another 16% decrease to $33,440. On this, Micheal Hartnett, Bank of America’s strategist leader, seeing the Bitcoin trade along with IPO and SPAC market trends, adjudges the investors are speculative.
As the Bitcoin velocity has double intensity than other biggest episodes of the market, strategists are asking if Bitcoin is the mother of all bubbles.
Moreover, many fear the 300% rally that continued to increase even in 2021 regardless of economies dealing with the after-effects of the pandemic. The increase in the value of the Bitcoin that started with a 60% surge in 2012 currently stays at 38%. The rising value has compelled many experts, like Scott Minerd, Chief Investment Officer at Guggenheim Investments to estimate its value at $400,000 per coin in the future.
However, a drop of 26% of the digital asset, this weekend has fueled the concerns of the investors who were keeping a close eye on the cryptocurrency market trends. Moreover, Global Strength Indicator (GSI) suggests that the drop over the weekend has triggered sell signals. GSI measures the upward and downward trends of closing prices. Other than closing signal-warning signs, GSI has also claimed that Bitcoin’s uptrend for twenty consecutive days has resulted in overbuying.
Chief Investment Officer at Independent Advisor Alliance, Chris Zaccarelli is unsure if Bitcoin is a good choice to allocate capital. This is why his team isn’t investing in it. However, if they do, Zaccarelli says, they would view the investment as speculative rather than as of value.
According to Chris, “Bitcoin is in the initial stages of upheaval. Whether or not if Bitcoin has entered a bubble, the results will reveal soon. Moreover, if it does, he says, it will be similar to previous bubbles.