Bitcoin's rally during the past year can't be discredited. Well into the half of the year and going into the latter part, it has been boosted by the biggest tech companies and their growing interest in bitcoin as well as other cryptocurrencies, Forbes reported.
Another further assumption for its strong showing is that the growing clamor for bitcoin by institutions has finally created a demand that powers its current surge.
The bitcoin price this year has reached heights that reminded people of the cryptocurrency's rally in 2017. It started this year at $3,500 per bitcoin, rising to highs of almost $14,000. Bitcoin and cryptocurrency's investors and followers apparently are seeing glimpses of what happened the last time it went on a run like this, climbing all the way up to the rate it ended at that year.
Binance's chief executive, Changpeng "CZ" Zhao, has his reservations, however. He warned that what's driving the latest rally-institutional demand might not be the driving point that it is right now. He is even looking at the worst possible scenario, where the already extreme volatility of the crypto-coin could get even worse.
Zhao may not be alone in his assumption that bitcoin and its dreaded volatility may bring the stocks down. Bankers and traditional economists have long been divided about the crypto-coins chances. While some think that it's just a cycle and one only has to observe closely, others are convinced that the unstable nature of bitcoin can turn off investor confidence, according to Livemint.
One of the biggest critics of the cryptocurrency is US president Donald Trump, whose criticism has placed the focus on this year's price surge. Rates tumbled last Friday to 12% for a $10.428.23 trading value. As for the other cryptocurrencies, Ethereum suffered a 15% drawback, while Litecoin also fell down to 14%.
That bitcoin is trending downward at the time of the president's comments isn't doing wonders, either. Continued disbelief from the US president continued to bear down on the cryptocurrency, according to Oanda Corp. Toronto senior market analyst Alfonso Esparza. It could also mean that the downward trend could continue, falling back to $8,000 and dropping all the gains it made since June, Esparza continued.
Bitcoin has been steadily holding its five-figure run since it broke through the $10,000 mark. However, with all the disbelief and the non-believers voicing their opinions, a massive sell-off of bitcoin reserves may trigger an uncontrollable, unstoppable fall back to pre-June values.