The effect: nearly $ 170 billion wiped from the cryptocurrency market in 24 hours. The virtual currency came with an upward trend in recent days.

Bitcoin and other digital currencies plunged on Monday, wiping out about $ 170 billion from the entire cryptocurrency market, according to a CNBC publication.

This virtual currency, which is attracting investors, had been on an upward trend and during the previous week had reached all-time highs close to $ 42,000.

However, this Monday the market capitalization – or the value of the cryptocurrency market – was 959.53 billion dollars, which placed it below the figure of the previous day, which was 1.1 trillion dollars. , according to CoinMarketCap.

The fall of bitcoin, considered the largest cryptocurrency, fell by more than 11% from the day before to $ 35,828.06.
In the accumulated of the last 12 months, bitcoin continues to rise by more than 340%, with a historical maximum achieved during the past week, when it was close to 42,000 dollars.

“The correction we saw was expected because we believe that the recent increase in the price of BTC from less than US $ 20,000 to US $ 40,000 in the last four weeks will induce selling pressure,” Simons Chen, executive director of investment and trade of the cryptocurrency financial services firm Babel Finance.

Bitcoin had a drop

The publication highlights that the $ 40,000 mark could have been a trigger for profit-taking, as expressed by Chen.

Why has the cryptocurrency resurfaced?

Bitcoin’s resurgence has been attributed to a number of factors including more purchases by large institutional investors, the CNBC post highlights.

Cryptocurrency has been compared to ‘digital gold’, a potential asset (safe haven) and a hedge against inflation, the newspaper article added.

Predictions for the future of bitcoin are diverse. Recent JP Morgan research spoke of a bitcoin rebounding towards $ 146,000 in the long term. This, in line with the fact that cryptocurrency competes with gold as an “alternative” currency, states the CNBC article.

Abrupt changes

With bitcoin, the forecasts are complex. It is well known that cryptocurrency is characterized by sudden price changes around its price. The investment bank’s strategists pointed out, however, that bitcoin would have to become substantially less volatile to reach the price estimated by JP Morgan.

Is it a bubble?
But some critics of bitcoin, like David Rosenberg, an economist and strategist at Rosenberg Research, have called bitcoin a bubble, according to analysis published on CNBC.

the pullback in bitcoin could be a buying opportunity for new investors.

“This short-term correction is both natural and necessary, and is a great entry point for long-term investors as we quickly hit $ 50,000 this quarter and $ 100,000 by year-end,” Chu told CNBC.

Other forecasts, such as those expressed last week by Social Capital’s Chamath Palihapitiya, suggest that bitcoin could exceed six digits. “It will probably go to 100,000, then to 150,000 and even $ 200,000, Palihapitiya told CNBC.

The big question is when will it happen. The expert points out that it may be five or 10 years, but the time will come.