Bitcoin prices have edged slightly higher as a culmination of factors boost the demand for riskier assets. Over the past month, fears over the rapid spread of the Omicron variant, regulatory concerns and rising inflation have weighed on the industry, allowing bears to dominate the systemic, prominent trend.
However, after falling by approximately 30% since the November all-time high, failure to break below $44,000 has allowed bulls to temporarily find support above the $48,000 handle.
As the safe-haven Dollar continues to remain under pressure, positive economic data and calming fears surrounding the new variant has allowed stocks and crypto’s to limit further losses, raising the prospect of a delayed ‘Santa Claus’ rally.
2021 has proven to yet again be an exciting year for bitcoin investors. The nascent asset (yes, I believe it’s still early) has risen to a market cap just under $1 trillion while notching a +100% return along the way.
Over the course of the year, bitcoin has undergone increased institutional adoption, the launch of a futures ETF, and the first major upgrade to the Bitcoin network in four years. The path forward has been anything but smooth as bitcoin investors have consistently weathered periods of gut-wrenching volatility. For some traders, this is an attractive feature of the asset, they eat volatility for breakfast. For others, it’s enough to keep their capital away entirely.
Bitcoin’s volatility is likely to dampen over time, but it’s not going away. The future of crypto is tethered to technological advancements, and higher prices likely hinge on exponential network growth, making the task of forecasting a specific price target a difficult endeavor. Regardless, as bitcoin undergoes further institutional adoption as an asset class, its returns will likely become more of a function of the current macro regime. Hence, without a view of cross asset class relationships and an understanding of where we are in the economic cycle, you might be trading in the dark.
However, after falling by approximately 30% since the November all-time high, failure to break below $44,000 has allowed bulls to temporarily find support above the $48,000 handle.
As the safe-haven Dollar continues to remain under pressure, positive economic data and calming fears surrounding the new variant has allowed stocks and crypto’s to limit further losses, raising the prospect of a delayed ‘Santa Claus’ rally.
2021 has proven to yet again be an exciting year for bitcoin investors. The nascent asset (yes, I believe it’s still early) has risen to a market cap just under $1 trillion while notching a +100% return along the way.
Over the course of the year, bitcoin has undergone increased institutional adoption, the launch of a futures ETF, and the first major upgrade to the Bitcoin network in four years. The path forward has been anything but smooth as bitcoin investors have consistently weathered periods of gut-wrenching volatility. For some traders, this is an attractive feature of the asset, they eat volatility for breakfast. For others, it’s enough to keep their capital away entirely.
Bitcoin’s volatility is likely to dampen over time, but it’s not going away. The future of crypto is tethered to technological advancements, and higher prices likely hinge on exponential network growth, making the task of forecasting a specific price target a difficult endeavor. Regardless, as bitcoin undergoes further institutional adoption as an asset class, its returns will likely become more of a function of the current macro regime. Hence, without a view of cross asset class relationships and an understanding of where we are in the economic cycle, you might be trading in the dark.