Since Bitcoin’s value dropped, experts and strategists have discussed different situations that could skyrocket the digital assets. Some people in the crypto community predict further BTC drop if the digital investment does not surge to its previous $40,000 range.
Amidst other factors, the selling pressure keeps weakening the digital asset, preventing it from overcoming its most significant hurdle, now being the resistance at the $38,000 mark. No one knows for sure, but JPMorgan strategists predict a possible price surge in BTC if the Grayscale Bitcoin Trust sees increased volumes. The strategists opine that if the digital asset does not rise in value soon, it will hurt its dominant market capitalization.
FOMO trend might have influenced investors
Like in 2017, where people saw the FOMO (fear of missing out) trend, 2021 might see something similar, especially with the overwhelming increase in new investors who took their BTC investment as a speculative asset. Numerous exchanges record new trading volumes primarily because of two reasons.
The first reason would be the increased selling pressure the digital asset currently faces and the new investors who recently joined the community to follow the trend or record massive profits within a short while. Ever since some thousand dollars were wiped out of Bitcoin’s price, there is a huge sign that its market cap would shrink, leading to a shrink in the global digital asset market cap because of BTC’s dominance.
Within the first few weeks of January, the cryptocurrency industry reached a $1 trillion milestone in market capitalization, with Bitcoin holding 70% of the total cap. The analysts opined that the FOMO trend kept Bitcoin moving, as it hit new highs in late December and January. They also noted that the bullish market could significantly affect the trader’s portfolio since Bitcoin worth lesser than it used to.
Grayscale’s Bitcoin Trust could surge BTC
The investment firm is a prominent member of the space, giving investors indirect exposure to the digital assets. Grayscale managed to significantly improve Bitcoin prices with their bearish runs and substantial investment volumes over the years.
The analysts explain that if Grayscale continues its daily volumes of over $100 million in the trust, it could lead to a surge any moment from now. The experts also revealed that more institutional monies entering Bitcoin would increase the digital asset’s price like it did in 2021. Talking about the FOMO, some fear that the trend was fading, and investors were looking into other assets.
Experts view that investors see Bitcoin as a speculative asset because the bearish momentum lost its steam when BTC started to decline. Sources believe that economic situations cause investments in digital assets such as Bitcoin. They opined that incidences like the global pandemic affected most economies, and crypto investments helped people store value within that period.
Not only that, some see Bitcoin as a way of diversifying one’s asset class to reduce gold exposure when the latter underperforms. Excessive money printing by various governments is also a reason people run to Bitcoin.