Bitcoin briefly tops $40,000, struggles To Standback after brutal sell-off


Bitcoin fluctuated between profit and loss as the cryptocurrency market tried to deal with major sell-off during the last session. 

Initially, on Thursday morning it climbed, trading as high as $40, 700 at one point, before falling as low as $38, 965. It was 2.6% at a price of $39,980 last time. 

Alternative cryptocurrencies of bitcoin also attempted a comeback Thursday in the market, along with ether up 2.2% at $2,676 and Litecoin rising 3% to $209. 

It comes after the cryptocurrency market crash. Bitcoin plunged 30% to nearly $30,000 at one point, before sorting out the losses made later in the session. In a single day, the entire market of cryptocurrency lost hundreds of billions of dollars. 

The move was likely to be mitigated by mixed gestures from Tesla CEO Elon Musk-who come to light as a bitcoin enthusiast earlier this year. 

Given the circumstances of the cryptocurrency market crash, Musk announced the suspension of his vehicle purchase with bitcoin on May 12. Bitcoin consumes more energy than entire countries like Argentina and Ukraine, according to Cambridge University researchers. The energy-intensive mining process is the cause that releases new bitcoins into circulation.   

Earlier this week, Musk recommended Tesla may have sold his bitcoin holdings, only to later clarify that the firm had “not sold any bitcoin.” Later he tweeted “diamond hands” emoji, indicating that Tesla would not shed any of its bitcoin. 

Besides the news that also affected Bitcoin’s price was that China had restricted financial institutions and payment firms to provide cryptocurrency-related services, reiterating its tough stance on digital currencies. 

“If you look at the history of bull markets, a correction of this size, between 30-40% of bitcoin price, tends to be part of the bull market,” Alyse Killeen, founder and managing partner of bitcoin-focused venture capital firm Stillmark Capital

Why Investors abandoned crypto?

Most folks who are bitcoin enthusiastic investors say that cryptocurrency is a kind of digital gold now, preventing inflation as central banks around the world struggles to soften the economic blow of the Covid crisis by printing money. 

However, in a note to clients this week, analysts at JPMorgan said institutional investors were dumping bitcoin in favor of gold, reversing the trend that’s played out over the last two quarters.

“I did talk to friends in the institutional bitcoin buy and custody space … and what I heard from them is that folks aren’t selling,” Killeen said.

Crypto Skeptics would surely argue on all the digital assets or cryptocurrency market assets that they are in a speculative bubble. According to the fund manager survey, Bank of America found “long bitcoin” was the most trade. According to the firm, 75% of fund managers said the cryptocurrency was in bubble territory. 

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James Robert is a journalist who covers all the social media and tech-related news for SG-educate, the world's largest multimedia news agency. He reports on tech from all over the world, focusing mostly on social media platforms. He has worked as a digital editor and online coverage of global breaking news on tech and big stories, reaching millions of readers across multiple platforms.

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