Bitcoin Falls More Than 25%
The price of Bitcoin sank along with other cryptocurrencies on Monday, with $200 billion in market cap being eliminated, according to CNBC.
At 9:20 AM ET on Monday, the market capitalization of cryptocurrency was $880 billion. According to Coinmarketcap, the cryptocurrency was worth $1.08 trillion 24 hours earlier.
Bitcoin lost 12 percent in the past 24 hours to $32, 576. Last week Bitcoin reached an all-time high of almost $42,000 last week. Ethereum, the second largest cyrptocurrency, fell 23 percent to $1,005.
“The correction we saw was expected as we believe the BTC price surge recently from under $20,000 to $40,000 in the past four weeks will induce sell pressure,” said Simons Chen, executive director of investment and trading at cryptocurrency financial services firm Babel Finance. He believes the $40,000 market could have led to profit-taking. The price of Bitcoin has surged in recent weeks due to bullish sentiment from analysts, interst from institutional investors, and fear-of-missing-out from retail investors.
However, Bitcoin has some critics such as David Rosenberg, economist and strategist at Rosenberg Research. Rosenberg believes Bitcoin is in a bubble.
On the other hand, Jehan Chu, founder of cryptocurrency-focused venture capital and trading firm Kenetic Capital, believes the pullback is an entry point for investors who missed out on the earlier rally. “This short term correction is both natural and needed, and is a great entry point for long-term investors as we quickly reach $50k this quarter and $100k by year’s end,” Chu said.