The difficult Bitcoin race took another turn on Monday, with the worst two-day drop in the digital currency since March, fueling concerns that the polarized cryptocurrency boom may fade.
Bitcoin, the largest cryptocurrency, fell 21% on Sunday and Monday, reaching $ 32,389. This is the biggest drop in two days since global markets were first affected by the pandemic last year and follows a record of almost $ 42,000 on January 8.
“It will be determined whether this is the start of a major correction, but now we have seen this parable break, so it can be,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.
Bitcoin’s price more than quadrupled last year, evoking memories of the 2017 craze that made cryptocurrencies a household name before prices plummeted just as quickly.
“It’s time to get some money off the table,” said Scott Minerd, chief investment officer at Guggenheim Investments, in a tweet from his verified Twitter account. “Bitcoin’s parabolic increase is unsustainable in the short term.”
Minister in late December predicted that Bitcoin could eventually catch up $ 400,000.
True Bitcoin supporters argue that the rise this time is different from previous boom and bust cycles because the asset has matured with the influx of institutional investors and is increasingly seen as a legitimate protection against dollar weakness and the risk of inflation . Others fear that the recovery will be free of reason and fueled by wide ranges of fiscal and monetary stimulus, with Bitcoin likely never serving as a viable currency alternative.
“Bitcoin is almost certainly in another bubble and its current growth rate is not sustainable,” said Howard Wang, co-founder of Convoy Investments LLC in a January 10 note. “While it may mature in the future, existing Bitcoin is largely a speculative asset.”
Read: How Bitcoin compares to the big bubbles in history
Bitcoin ignored the recent declines and may do so again, potentially recovering to as much as $ 44,000 “before the actual correction,” said Ayyar de Luno.
Bitcoin was close to the session lows at around $ 33,200 at 7:08 am in London. Rival digital assets are also falling, with the second largest Ether currency falling 21%.
Read: Does Bitcoin Boom mean ‘Best Gold’ or bigger Bubble? QuickTake
– With the help of Mark Cranfield
(Updates with additional details and comments from Minerd.)