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Cryptocurrency This Week: Bitcoin Price Slumps 6% In One Day But Crypto Players Say Bull Run Will Endure

Cryptocurrency This Week: Bitcoin Price Slumps 6% In One Day But Crypto Players Say Bull Run Will Endure

Bitcoin is currently trading at over $22K. A little more than 24 hours ago, it was trading at a record high of around $24,298, before slumping around 6%

Indian crypto stakeholders have said that despite periodic price corrections, the price of one Bitcoin will breach INR 1 Cr by 2030

Industry stakeholders have attributed the ongoing bull run to the interest shown by institutional investors in cryptocurrencies

Bitcoin, the world’s leading cryptocurrency, is currently trading at over $22K. A little more than 24 hours ago, it was trading at a record high of $24,200, before slumping around 6%, as fears of a new Covid-19 strain in the United Kingdom gripped financial markets the world over. 

While most crypto stakeholders assert that the price of Bitcoin isn’t punctuated by the sentiment in the financial markets, there have been events in the last few years where the fluctuations in the price of Bitcoin have mirrored the movement of assets across wider markets. 

Other popular but smaller cryptocurrencies such as Ethereum and Ripple also fell 5.9% and 9.2% respectively. 

Nevertheless, in conversations with Inc42, Indian crypto stakeholders have pointed out that investing in Bitcoin is not for the faint-hearted, also expressing optimism that despite periodic price corrections which are bound to happen with any asset class, the price of one Bitcoin could reach single-digit crores by 2030. 

“At ZebPay, we encourage dollar-cost averaging — investing fixed amounts at regular intervals, regardless of the price of the asset class and sticking to your investment plan through the ups and downs. If you had invested INR 1,000 per month in Bitcoin since November 2019, you would have seen, on average, an 87% ROI (return on investment), with the present value being approximately INR 23,000,” said Vikram Rangala, chief marketing officer at ZebPay.  

The surge in the price of Bitcoin is attributable to its strong fundamentals, as pointed out by Sumit Gupta, cofounder and CEO of Mumbai-based crypto exchange CoinDCX. Further, on May 11 this year, there was the third halving of Bitcoin, a supply shock event where every four years, the number of bitcoins mined on a single day gets cut in half.

“In the months after the previous two halvings, Bitcoin and the overall crypto market cap rose exponentially, and we are witnessing a start of a similar bull trend,” said Gupta. 

Gupta added that institutional investors driving up the demand for Bitcoin could further ensure that there’d emerge a class of ultra-rich Bitcoin hoarders or whales, something that’s instrumental in ensuring that the price doesn’t fall as drastically as it has risen this year. 

Many payment companies like PayPal, Square are integrating cryptocurrencies in their services due to the rising demand for crypto from retail investors. Recently, Massmutual, an insurance giant, moved into Bitcoin investments.  Additionally, Alan Howard, billionaire hedge fund manager, is among the backers of a new institutional investment firm, called One River Asset Management, which is eyeing a $1 Bn investment in Bitcoin. 

‘In the short term (for the year 2021) the price could range between INR 50 Lakhs – INR 1 Cr for one bitcoin, owing to, the Bitcoin halving and growing global institutional demand,” Gupta said. 

Vikram Subburaj, cofounder and CEO of Chennai-headquartered Giottus Cryptocurrency Exchange, made similar observations. 

“The UK-based Ruffer Investment, a recent example of investors looking to hedge their investment, had invested 2.7% of its AUM (assets under management) in Bitcoin this November. Even insurance companies like MassMutual, the Massachusetts insurance firm with $235 Bn in AUM, dipped its toes into Bitcoin with a $100 Mn purchase. With more players joining the bandwagon we will be noticing more price increases in the days to come,” Subburaj told Inc42

Prices

At the time of writing, Bitcoin was trading at $22,672, a nearly 17% increase from last week’s price of $19,302. Its market cap was $419 Bn. 

Ethereum was trading at $598, a 2.2% increase from last week’s price of $585. Its market cap was $67 Bn. 

Other News 

Indian Crypto Exchange CoinDCX Raises $13.5 Mn In Series B Round Led By Block.one

Mumbai-headquartered crypto exchange CoinDCX has raised $13.5 Mn for its Series B funding round, from a host of international crypto investors, including returning investors from previous rounds. The funding round was led by Block.one, a Cayman Islands-headquartered software firm specialising in high-performance blockchain technologies, and included DG, Jump Capital, Uncorrelated Ventures, Coinbase Ventures, Polychain Capital, Mehta Ventures and Alex Pack.

Bitcoin rally: Amid crypto king’s surge, Coinbase CEO warns frenzied investors of risk

Coinbase CEO and cofounder Brian Armstrong has cautioned crypto investors of the inherent ‘risk’ in the asset class. “We cannot emphasize enough how important it is to understand that investing in crypto is not without risk. For one, crypto can be a volatile asset class — often more so than the types of traditional financial instruments that most investors are used to.” You can read the full story here