BTC just dropped 10%+ in value this week. Is now the time to buy or should you stay away from this digital asset?
This week, the price of bitcoin fell below $26,000 due to decreased market activity, a worsening real estate crisis in China, and an allegation that SpaceX sold at least some of its bitcoin holdings.
KEY Take Aways
As trading volumes on exchanges have decreased and the impact of large transactions has increased, the bitcoin price has become more susceptible to wild price fluctuations.
- Elon Musk’s SpaceX reportedly sold at least a portion of its bitcoin holdings.
- Bitcoin may continue to be regarded as a high-risk asset due to fears that problems with China’s property market will exacerbate the economic downturn.
- Price Volatility Increased As Trading Volume Decreased
According to reports from blockchain analytics firm Glassnode and cryptocurrency firm Coinshares, a general lack of interest in the crypto market is a factor in this week’s bitcoin price decline. While bitcoin began the week trading around $29,400, it dropped to approximately $25,690 by mid-Friday.
The 2024 Halving
Bitcoin uses a proof-of-work consensus mechanism, requiring Bitcoin miners to solve complex computational problems to earn the right to process new blockchain transactions. Bitcoin is created as a recompense for all of this work. Currently, the reward per block is 6.25 coins. Approximately in April 2024, the compensation will be halved to 3.125 coins. This event occurs approximately every four years and is known as a halving.
Although the past cannot predict the future, Bitcoin’s price has typically increased beginning several months before a halving event. In addition, this upward trend persists 12 to 18 months after a diminution. This indicates that now could be an excellent time to purchase.
BTC is and always will be valuable. When you decide to buy more doesn’t really matter in the long run. The asset is being used for everything as a store of value to being used to deposit money at Bitcoin sportsbooks. Its not going away and will only increase in value.