Bitcoin’s price has faced a massive correction in the past few days, with cryptography falling by up to 6.7% on March 25, and registering a 24-hour low of $ 50,623.90. In addition, the asset price fell about 17% from last month’s $ 61,711.87 ATH this month. The current price drop has been thought to be due to the expiration of options of US $ 5 billion in Friday.
But according to the head of Forbes Crypto research, Steven Ehrlich, there are several reasons for explain Bitcoin’s recent volatility. Speaking to Jill Malandrino, Ehrlich of the Nasdaq Trade Talks program explainedited that some institutional investors who bought the crypto asset are now profiting from their holdings.
The analyst said that a “major concern” for Bitcoin markets is the fact that central banks are raising interest rates. Cryptography, which is often seen as protection against the risks of inflation, is now being traded more as a “risky asset”.
Ehrlich admitted that he remains optimistic about Bitcoin, at least in the long run. However, he warned that, in the short term, Bitcoin may have a “minor correction” and may even have periods of “side trading”.
Interestingly, Bitcoin gained 679.5% over the year, while Ether increased 1066.9% in the annual period. When asked why the biggest altcoin outperformed Bitcoin last year and is on track to perform better again in 2021, Ehrlich revealed two reasons.
He said that, lately, Ether has been gaining importance among institutional investors who continue to show interest in ETH. For example, Meitu, a Chinese technology company, recently added $ 17.9 million in Ether (and $ 22.1 million in Bitcoin) to its balance sheet.
In addition, as NFTs have received more attention, this could increase Ether prices even further, as most tokens are built on Ethereum. The platform is also the right choice for many DeFi projects. As the sector of the decentralized economy continues to grow, with more $ 38 billion in the total blocked amount, Ether could continue to recover.
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