Bitcoin Price | BTC’s Sudden Spike Leaves All Puzzled
The cryptocurrency market has again undergone strict scrutiny after analysts and market players were shocked by the sudden jump in Bitcoin price two days back on Tuesday. The shocking spike in the price generated fear about the high volatility and risk involved in the cryptocurrency market. Investors and analysts, rather than celebrate, have become all the more conscious about the vulnerability of the market.
After the 2017 bubble, on Tuesday Bitcoin price surged almost 20% above its previous price, provoking many altcoins to increase in price as well. Analysts are busy searching through the records and charts to find the reason for Bitcoin’s spoke. Twitter also caught the frenzy, being flooded with posts and comments about the crypto happenings.
Changpeng Zhao, CEO of Binance, tweeted wondering whether anyone had any clue about this rise, as he himself was clueless.
While many ignored the rush by saying that volatility is the main feature of cryptocurrencies, others anticipated large-scale buying by anonymous investors to skyrocket Bitcoin price further. One explanation currently floating around about the spike in BTC involves a fake news article claiming US SEC would approve Bitcoin ETFs.
However, investors are more worried about the malfunctioning in the cryptocurrency market that Bitcoin’s spike indicates. The whole market is saturated with problems of the unpredictability of data, price, liquidity concerns, and the lack of assigning a fair value to digital assets.
Obi Nwosufrom, from the Coinfloor Exchange (London Based), said that the market is completely decentralized and there is no tool or technique yet to find a fair value for the assets in this market, which is why it is so vulnerable and volatile.
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However, what’s happening now is reminiscent of the 2017 investor-led crypto bubble that brought Bitcoin price close to $20,000. At that time, regulator intervention drove many of those investors out of the market, resulting in BTC price crashing at the start of 2018.
At present, the cryptocurrency market is being driven by individual investors with high net worth, hedge funds, and blockchain IT firms. Long-term money is still very much absent in the crypto space.
The reason behind this is explained by David Mercer, LMAX Exchange Group CEO. He explains that cybersecurity and governments’ stance are the two major hurdles in the market for long-term investors.
On Friday, Bitcoin price was trading up marginally at $4,990 USD.
Featured image: DepositPhotos © stevanovicigor
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