Bitcoin is approaching the $40,000 mark again. Today (Feb. 1), the bitcoin price rose 2% to $38,262.18.
Bitcoin’s positive movement this morning signals a short-term recovery after reaching the all-time high back in November. For 2022, experts assume that further downward pressure will prevail in the crypto market. This should let Bitcoin slide even below $30,000. But in the long run, many agree that Bitcoin will scratch the $100,000 mark.
Bitcoin fell to less than half of its then all-time high this month after the price plunged from more than $47,000 to less than $34,000 in the first three weeks of this year.
The cryptocurrency market as a whole is moving in a similar direction. Ethereum, Binance Coin, Solana, and Dogecoin all fell sharply in early January. As Bitcoin seems to be recovering in the short term, the altcoins are recovering as well.
Bitcoin exchange reserves are also declining. This suggests that a tighter Bitcoin supply could drive up the price in the short term. Bitcoin farms already started keeping a certain share of mined Bitcoins since last year. A similar picture is seen among long-term investors who see no reason to part with their Bitcoins and tend to withdraw them from the exchanges.
Fidelity Investments, meanwhile, has said that Bitcoin must be viewed separately from other digital assets. In a report, they wrote, “Bitcoin is fundamentally different from any other digital asset. No other digital asset is likely to improve upon bitcoin as a monetary good because bitcoin is the most (relative to other digital assets) secure, decentralized, sound digital money and any “improvement” will necessarily face tradeoffs.”
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Tuesday, February 1, 2022