This weekend, Bitcoin and alternative coins such as Ethereum and Ripple experienced another dip.
Bitcoin price fell down by as much as 15% on Sunday, with Ethereum experiencing a similar fall, followed by Ripple which experienced a 30% price decrease. Though prices stabilized later Sunday and early Monday in Asia trading, Bitcoin is still about $57,000, down around 12% from last week’s intraday high.
What caused the dip?
There is no single answer, as is often the case, particularly with assets such as cryptocurrencies, where it is often unclear who is selling or purchasing. According to the analysts, these might be some of the reasons why.
Concerns surrounding regulations
The Turkish central bank announced on Friday that they would ban cryptocurrencies as a means of payment as of April 30. Also, companies within Turkey that manage payments and electronic fund transfers will be prohibited from handling transactions involving crypto platforms.
Central banks’ proposals to establish digital currencies, such as China’s for the yuan, and the ban on cryptocurrency mining in Inner Mongolia, which has long been a favorite of the industry due to its cheap electricity, are two other sources of regulatory pressure.
Over the weekend, there was also online speculation that the US Treasury is planning to clamp down on money laundering by digital assets. However, there is no official news on the rumor as of yet.
Due to too much excitement
According to Mike Novogratz, a long-time supporter of crypto and founder of Galaxy Digital, the dip was inevitable because of the excitement surrounding Bitcoin, Ethereum, as well as Dogecoin.
Novogratz says the prices will soon stabilize, as wealthy institutions join the space during the next few months.
What awaits us?
The problem with making any kind of cryptocurrency price projections is that there aren’t many fundamental metrics from which to base forecasts. Much depends on educated guesses about whether institutional investors will buy in and whether Bitcoin bulls will sell.
According to researcher Flipside Crypto, less than 2% of accounts manage 95% of the available supply. As a result, a single large investor may have a disproportionately large effect on the still illiquid sector.
Morgan Stanley and Goldman Sachs Group Inc. are both preparing to give clients access to crypto investments, indicating an increasing curiosity among the wealthy. JPMorgan Chase & Co. analysts predicted in January that Bitcoin could hit $146,000 in the long run, a target they recently lowered to about $130,000.