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causes, consequences and foggy future of bitcoin

DATE OF PUBLICATION: 2021-02-23 13:37:47 In February 2021, bitcoin made a real breakthrough, repeatedly rewriting the record for maximum value. The interest of large investors, the development of software to expand the capabilities of the cryptocurrency, as well as wide publicity in the world media have caused a significant increase in the price of bitcoin. However, many experts agreed that such a sharp jump in the price of the main digital asset is not justified and a price correction awaits the cryptocurrency soon. As analysts at JPMorgan Bank and Elon Musk suggested, the price of bitcoin turned out to be overestimated, and in the past few days the market has been rapidly corrected the quotation of the first coin. Having reached a record high of $ 58.3 thousand on the weekend, the crypto asset began to fall rapidly and over the past three days has fallen in price by $ 10 thousand. As of 12:00, the main crypto asset has leveled off a little and holds indicators at $ 48.4 thousand. Over the past day alone, the value of bitcoin fell by 12%, which caused colossal losses for retailers – more than $ 4.4 billion. Due to the decline in cryptocurrency, world exchanges liquidated the positions of 466 thousand users. The largest loss of a single trader was $ 20.6 million. Almost 90% of closed trades were long, which suggests that traders hoped to increase their profits, counting on the further growth of major cryptocurrencies. Trades worth $ 2 billion were paired with bitcoin, another $ 1 billion in closed positions on ethereum. The sharp drop in the price of bitcoin was very painful, but necessary for further growth. Despite the huge losses for traders, the price correction pacified the ardor of Bitcoin, which clearly did not match the price of $ 58 thousand. The continued growth of the cryptocurrency was associated with the situational mood of investors, who were inspired by the Tesla Motors case and, against the backdrop of good economic indicators, began to storm the cryptocurrency market. In this regard, bitcoin “suffered” more than others, because most of the investments were directed to it. The first cryptocurrency showed signs of independent growth and even some stability. However, the past few weeks have begun to transform this advantage into a clear disadvantage. The first digital asset could be hostage to investment and economic sentiment in the global financial markets. Its growth and development would be directly dependent on the current indicators of economic growth, and, as a result, the asset would turn into a seasonal investment instrument showing abnormally unstable numbers. Market correction to some extent interrupted this vicious circle, allowing Bitcoin to take the pause necessary for its further growth. We assumed that the growth of the first cryptocurrency would continue until the end of February, however, the digital asset significantly surpassed the wildest expectations, reaching $ 58 thousand within a few days. There is every reason to believe that Bitcoin will reach $ 67 thousand in the spring. The more global growth of the first cryptocurrency and the entire digital asset market will depend on the behavior of investors and future projects Visa and Mastercard, which may stall if Bitcoin continues to show dependence on sharp and short-term injections of large companies. Material provided by InstaForex – Source – InstaForex

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