What’s The Value Of Bitcoin Today

Cryptocurrency is volatile, with a track tape of
“blast and bust“
cycles that have left many wondering whether it’s safe to invest.

The price of bitcoin, the virtually popular cryptocurrency, dropped below $16,000 once again in November, a year later on information technology reached a record high of $69,000 in Nov 2021. It’s currently worth more than than $17,000.

With the digital currency on a downward trajectory, what’s fuelling it?

In this commodity nosotros explain:

• What is happening to the value of bitcoin and why
• Why is bitcoin so volatile?
• Has bitcoin’s chimera burst?
• Volition bitcoin recover?
• If bitcoin will become upwardly if the stock market crashes

What is happening to the value of bitcoin and why?

Bitcoin is incredibly volatile. It is decumbent to rising and falling sharply on a daily footing. But it’s not the simply cryptocurrency to have had a tumultuous time recently.

Global stocks accept gone into a downturn every bit result of:

• The war in Ukraine
• Inflationary fears
• Higher interest rates, which will make information technology more expensive for businesses to borrow money

This has spilled over into the cryptocurrency marketplace.

The electric current slump in November 2022 has been triggered by the collapse of FTX, which handled around $1 billion transactions each day. Its collapse is having a knock-on event on other crypto exchanges.

In June 2022 bitcoin dropped below $20,000 for the first time since 2020. This was prompted by the decision of Celsius Network, a major US cryptocurrency lending company, to freeze withdrawals and transfers, citing “extreme” weather.

The motion fuelled a slump across the cryptocurrency market.

China’s continued crackdown on crypto is playing a role too. And there has besides been speculation that crypto operations could come to a halt in Russian federation.

In add-on to this, there take been sudden and astringent sell-offs of major cryptocurrencies. This has triggered panic and further sell-offs as consumer confidence is knocked.

Why is bitcoin and then volatile?

Unlike traditional investments such as company shares, where cost movements may well be influenced by the performance of the business, bitcoin has no underlying asset.

This means that the movements in its cost are based purely on speculation among investors about whether information technology will rise or fall in time to come.

As a result, in that location tin can be vehement swings in the price of bitcoin, even in the space of 24 hours.

At the moment, high inflation and a cost of living crisis are causing people to reduce their investment run a risk by selling their cryptocurrency.

In that location take also been a number of incidents that accept caused the price to fluctuate:

Negative stories

A number of negative stories and threats of further regulation take pushed the price of bitcoin downwards.

These include:

• In November 2022 cryptocurrency commutation FTX went bust later on its rival Binance pulled out of a deal to buy it
• In June 2022, Celsius Network, a major U.s.a. cryptocurrency lending company, froze withdrawals and transfers, citing “farthermost” conditions.
• Also in June 2022, Binance, 1 of the world’due south largest cryptocurrency exchanges, paused bitcoin withdrawals, with chief executive Changpeng Zhao blaming a “stuck transaction” that was causing a backlog.
• Early in 2022, it was reported that Russian federation might ban cryptocurrency operations. Just and so, after the invasion of Ukraine, there were calls for crypto exchanges to ban Russian transactions.
• In May 2021, Tesla boss Elon Musk said that the electric automobile maker would no longer be accepting digital payments over concerns nearly the touch of cryptocurrency “mining” – the calculating power required to create the likes of bitcoin – on the environment.
• In June 2021, banks and payment institutions in Communist china were told to stop enabling crypto transactions, and the Chinese government banned the mining of the currencies. So in September 2021, all crypto transactions were declared illegal, in effect meaning that the likes of bitcoin were banned.
• Besides in June 2021, then US president Donald Trump described bitcoin as a “scam” competing confronting the dollar to be “the currency of the world”.
• FBI agents have seized millions of dollars in bitcoin from criminals down the years.
• In August 2021, UK regulator the Financial Comport Authorization in effect blacklisted Binance, i of the largest crypto exchanges. Big banks such as HSBC and Santander followed suit by blocking customers from making payments to Binance.
• In the aforementioned month, the International Budgetary Fund issued a alert on countries using cryptocurrencies every bit legal tender, maxim its widespread use would threaten “macroeconomic stability” and could harm financial integrity.
• Crypto heist: concluding Baronial, a hacker stole $600m in a cyber attack targeting the crypto platform Poly Network, only to return more than one-half of it iv days later saying they did information technology “for fun” and to “expose the vulnerability” in the system earlier others did.

Positive stories

But in that location have been more positive stories, and these take given the bitcoin price some protection over the by year:

• In March 2021, Morgan Stanley became the first large US bank to offering wealthier clients admission to bitcoin funds – albeit restricted to no more than ii.five% of an investor’due south total cyberspace worth.
• In June 2021, a month after sparking a crypto sell-off, Elon Musk said Tesla would probably accept bitcoin payments again when more than than 50% of its energy usage came from renewable sources.
• Amazon posted a task advert for a “digital currency and blockchain production pb” in July 2021, prompting speculation that it would soon accept bitcoin as payment.
• Last September, El Salvador made bitcoin legal tender.

Other stories have been more mixed in terms of what they hateful for cryptocurrencies. Among them has been the US Federal Reserve considering whether to launch its ain “key banking company digital currency” (CBDC).

In March this year, President Joe Biden issued an executive gild that aims to co-ordinate the US government’southward actions on the regulation of digital assets.

While many crypto fans think regulation is a bad thing, some think this new executive social club could assist with the development of digital avails, such as the CBDC, to ensure the right consumer protections are in place.

Read our commodity here if you are still wondering whether or not to invest in bitcoin.

Has bitcoin’south bubble outburst?

In 2021 the price soared by more than 700% in 12 months to a record loftier of $69,000 in November

It certainly seems similar bitcoin’s chimera has burst every bit investors take lost confidence in the crypto sector. It is uncertainty over the future of bitcoin which has caused prices to crash.

In June 2022, it plummeted below $xviii,000. Information technology was notwithstanding below $20,000 by Nov 2022, merely a year after its record loftier of $69,000.

When avails rise very quickly in price and surge to a record high, typically this makes a crash much more probable – or at to the lowest degree a correction, which is when the cost falls back down to a more “normal” level.

This appears to be the situation that bitcoin is in right now. It took the cryptocurrency:

• eleven years from launch to go to $xx,000 per coin
• Only but iii weeks for bitcoin’due south toll to double from there

A decisive year for crypto investors was 2013. Bitcoin’s toll went from $xiii.40 at the start of the year to its height in December of $i,156.10, before falling to nigh $760 three days later.

Where information technology is heading next is every bit unpredictable.

Check out one Times Money Mentor reader’s crypto experience: “Bitcoin’s rollercoaster ride has swept me to an £viii,500 profit in less than a year”

Will bitcoin get back up?

There are no guarantees when it comes to investing. Equally quickly as bitcoin falls, it could only as rapidly climb again.

There are a number of concerns about cryptocurrencies that are dampening its prospects:

• Cryptocurrency exchanges going bust
• Crackdowns in countries like Cathay
• Calls for greater regulation beyond the earth
• Environmental concerns
• Security issues and hacks
• Their price is based solely on speculation

Further regulation is seen every bit a threat to the decentralisation of crypto, which is having an impact on the prices of digital currencies.

Bitcoin’s fans signal to its positive qualities:

• Transformative engineering that could revolutionise industries
• Simpler and cheaper transactions past cutting out “center men” such as banks
• Easier global trade because, with a non-fiat digital currency, in that location would be no concerns about exchange rates
• Transactions are more confidential
• It is a  safe store of value considering information technology can’t exist printed or seized
• Bitcoin has been touted every bit an alternative to gold, meaning it could bear witness itself as a hedge against inflation

Given its volatile nature, it is possible that bitcoin will gather momentum once more at some point in the futurity (maybe weeks, months or even years down the line).

Just no ane has a crystal ball and the speculative nature of bitcoin makes it difficult to predict.

Find out more than about the tips (and mistakes to avoid) when investing with cryptocurrencies.

Volition bitcoin go upwards if the stock market crashes?

Not necessarily. Supporters of bitcoin come across it as a diversifier in balanced portfolios, but it did no better than stocks at the kickoff of the coronavirus pandemic. This is considering investors panic-sold everything.

In the first two weeks of March 2020, bitcoin went down by more than forty%.

“That was when nosotros saw all equity markets accept an ambitious leg down because of concerns about Covid-xix,” notes Rosie Bullard, partner and portfolio manager at James Hambro & Partners. “So it wasn’t exactly a store of value in an disinterestedness market reversal.”

“If you look back to March of last year when nosotros saw the marketplace collapse, you didn’t see bitcoin suddenly rally in that period.”

Rosie Bullard, partner and portfolio managing director at James Hambro & Partners

That said, how crypto avails perform during stock marketplace falls will depend on why fiscal markets have collapsed.

If it was all about an inflationary shock, such as happened in 1974, most bitcoin investors believe it would provide protection.

If you want to read more than about the alternatives to bitcoin, bank check out our article hither.