Investors around the world continue to clamber for Bitcoin. It has climbed over $3500 in two weeks, from $5560 to nearly $9200 at press time. Every time we think we’ve seen “the craziest market move ever,” Bitcoin surprises yet again. While we continue to approach the pivotal $10,000 USD mark, Bitcoin has already reached a momentous milestone in terms of Japanese Yen: 1 million.
Japan recently licensed a dozen exchanges, and the country has been carrying the bulk of the world’s trade volume ever since.
As soon as Bitcoin conquered the $8000 milestone, it felt like investors mutually understood that Bitcoin would see $10,000 by year’s end. The digital currency has made unimpeded progress toward the mark ever since. The question now is ‘What happens after $10k?’
With the recent run-up in mind, we will probably see a pullback. It is rare for an asset to appreciate 80% in two weeks without a natural correction, and investors will undoubtedly seek indemnification. The psychology involved in that is powerful enough to bring it to pass, even without any negative news. Add to that the ‘convenient’ timing of the FUD (China, Dimon, etc.) we experienced shortly after BTC reached $5,000, and I just wouldn’t be surprised to see a similar scenario unravel.
On the flip-side, through the course of this recent run-up nearly $100B has entered the crypto space. That’s right, in the span of two weeks the crypto market cap has increased 50%. Hard to fathom?
It is difficult to predict the aspirations of this “new smart money.” Are these contenders playing the squeeze to $10k and then backing out? Are they new ‘to-the-mooners’? More importantly, will these newcomers be forever alienated from crypto if they buy at the top and get burned?
That would be the worst case scenario for the long term longevity of Bitcoin. As a community, we need adoption and healthy growth to continue on our current path. While many of us have weathered these tumultuous ups and downs are prepared for more to come, there may now be a record number of non-veterans among us, and for their sake I hope the price action is gentle.
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