Bitcoin prices briefly slipped below $8,000 each on Thursday for the first time in three months, though the cryptocurrency is still more than double its level at the start of 2019.
What do these bold – and volatile – moves mean for the ecosystem?
David Nage, principal at the Los Angeles-based money manager Arca Funds, discusses his views on this week’s price drop and whether price volatility in cryptocurrencies might turn off big investors.
Nage, who saw bitcoin’s price to be artificially range bound until this correction stated:
With bitcoin, where there’s potentially a drop, obviously you can see it as a potential to buy.
Nage believes that as an asset bitcoin is akin to future-pointing equities like Netflix and Amazon. “We’re not in the business of price predictions,” said Nage.
If supply continues to get cut in half and the demand continues to rise, classical economics shows the price increases.
Catalysts for price action
And while the BTC’s halving set for release on May 15, 2020 is potentially bullish, both the technical and fundamental views point toward uncertain times ahead for BTC’s direction after its recent sell-off threw into question the long-term trend.
Soravis Srinawakoon Co-Founder and CEO of Band Protocol said:
Looking at the technical chart of Bitcoin, we’ve been seeing a squeeze in a descending triangle of the Bitcoin price in the past few days combined with the recent disappointing launch of Bakkt it is clear there is an overall negative macro sentiment in the market.
Band Protocol connects smart contracts with trusted off-chain information, provided through community-curated data providers.
Disclosure: The author holds no cryptocurrency at the time of writing.
Sebastian Sinclair contributed reporting.
Teddy Bear via Shutterstock.