The current rally of Bitcoin which is just under $20,000 at an all-time high has investors gear for market volatility.
Bitcoin has moved a remarkable amount and finally crossed its three-year high with over $18,000 today. The movement has been in motion for some weeks now which has had investors gearing for extreme volatility in the financial market.
The surge in the market value of Bitcoin and other cryptocurrencies is largely due to the investments made by institutional corporations in the U.S. who are investing their treasuries in cryptocurrencies. Noticeable movement in numbers was noted when several institutions made their investments. Bitcoin, cryptocurrencies, and ETF assets have experienced a large increase in volume this month.
Huge investments into Bitcoin by crypto-funds, such as that of Grayscale, who holds up to $10.4 billion of bitcoin and other cryptocurrencies, and from Salinas, who has spent millions and has a 10% liquid Bitcoin portfolio, have made a great impact on the Bitcoin value. Many crypto funds are reported to receive high-returns such as that of 3iQT’s Bitcoin Fun got returns of over 49% over the last month.
With the increasing number of investors, speculations are being made about Bitcoin surging over $20,000 in early 2021. Institutional investments are playing an immense role in the sudden increase in value. While retailers are still hesitant to trust the volatile cryptocurrencies, they are sure to start investing if the numbers keep moving upwards.
While the number of investments in Bitcoin and other cryptocurrencies is steadily increasing, many investors are worried about how it will affect market volatility.
The financial market space has faced a lot of volatility ever since the spread of the pandemic. Now with the sudden rise in the value of Bitcoin and other cryptocurrencies, investors fear the high volatility this change will bring.
Experts are skeptical about the current value of Bitcoin and warn investors to be prepared to face large swings as large as $1000 within a matter of minutes. The Bitcoin market space has always been a volatile place with huge fluctuation rates.