Bitcoin has been on a rollercoaster ride in the recent weeks with a peak trade of above $40,000, its highest since May.
The Bitcoin rollercoaster as it seemed had been on a steady downward descent since its record-breaking April peak of $65.000. However, with a fascinating flight over the course of the past two weeks, bitcoin regained some value. It was able to see the highest trade peaking slightly north of $40,000, its highest since May.
Several factors can be attributed to this rollercoaster ride for value by Bitcoin. The most prominent factors include consistent support from business magnate, Elon Musk and his company, Tesla in which he is serving as the CEO.
The CEO of Tesla had reiterated his confidence in Bitcoin earlier. Tesla Inc. too had authorized acceptance of bitcoin as a mode of payment in February. Bitcoin’s integration was followed by Tesla purchasing a record-breaking $1.5 billion worth of Bitcoin the same month. However, Tesla discounted the acceptance of Bitcoin as a mode of payment just a few months later. At that time, Elon Musk attributed Tesla’s decision of disengagement from Bitcoin payment to environmental concerns.
Once again, in recent weeks, Elon musk has affirmed his confidence in Bitcoin, at a virtual panel discussion. The virtual discussion was hosted by the Crypto Council for Innovation. During his address Musk stated that very soon Tesla will be reinstating the Bitcoin payment mechanism. He said that when Bitcoin production will rely on 50% renewable energy sources, then the Bitcoin payment system will be reinstated.
Furthermore, speculation arose when Amazon posted a job opening for digital currency and blockchain lead on the 22nd of July. This job posting induced speculation, such as the world’s largest online retailer accepting cryptocurrency as a mode of payment in the near future. Such speculation sent Bitcoin spiraling upwards. But later on when Amazon denied such a possibility Bitcoin again tumbled down.
Investor Cathie Wood from ARK Invest has also shown keen interest in Bitcoin. There are reports of a filing with the Securities & Exchange Commission indicating the company’s intention of creating a Bitcoin exchange-traded fund. According to the SEC’s filing, the investment objective of the EFT is to track the performance of Bitcoin.
However, Edward Moya senior market analyst for North America at Oanda Corp had some things to say about Bitcoin. He predicted the recent market run of Bitcoin over the weekend to be strong and expected the lack of institutional interest. He then claimed that the volatility of Bitcoin will remain on the higher side. If there is a spike leading Bitcoin to US$ 42,000 valuation, then there wouldn’t be any surprising factor, said Moya.
He further makes a prediction about the future of Bitcoin. According to Moya going above the price range of US$ 50, K would require some struggle from Bitcoin’s end. But if Bitcoin is able to achieve that then this would trigger fresh inflows and send a positive signal throughout the crypto market.