Bitcoin is back below $39,000 after hitting a three-year high of $49,000 on January 11
Bitcoin has fallen by over a fifth since its peak earlier this month. The cryptocurrency hit a three-year high of $49,000 on January 11 after US regulators approved so-called exchange-traded funds (ETF) linked to bitcoin.
But it traded back below $39,000 yesterday – down more than 20 percent in less than two weeks – as traders who had bought in expectation of approval sold and pocketed their profits. It is at its lowest level since early December.
Although there was much excitement about the launch of bitcoin ETFs in the US, the response has been underwhelming, underlining the volatility of cryptocurrencies.
Bitcoin peaked at $69,000 in November 2021 but had tumbled to $16,000 by December 2022 amid the collapse of the FTX exchange in a giant fraud that rocked the industry.
Approving the ETFs this month, Gary Gensler, the Securities and Exchange Commission’s boss, clarified his feelings on Bitcoin. ‘We did not approve or endorse Bitcoin,’ he said.
Bitcoin’s Price History
Bitcoin was designed to be used as currency in daily transactions. Since it was first introduced, Bitcoin has had a choppy and volatile trading history. As an asset class, Bitcoin continues to evolve along with the factors that influence its prices.
While Bitcoin is still a cryptocurrency, investors have also used it to store value and to hedge against inflation and market uncertainty.
Among asset classes, Bitcoin has had one of the more volatile trading histories. The cryptocurrency’s first significant price increase occurred in Oct. 2010 when the value of a single Bitcoin started moving past its long flat price of $0.1.1
Bitcoin has undergone several rallies and crashes since it became available. Cryptocurrency gained mainstream traction as a means of exchange. It also attracted traders who began to bet against its price changes.
Investors turned to Bitcoin as a way to store value, generate wealth, and hedge against inflation.
Institutions worked to create Bitcoin investment instruments. Due to the growing interest of investors, economists, and governments in Bitcoin, other cryptocurrencies began to be developed around 2017.
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