In a recent video, well-known cryptocurrency analyst and trader Tone Vays expressed his preference for a slower and steadier growth trajectory for Bitcoin BTC/USD, the largest cryptocurrency by market capitalization. He cited the 2019 parabolic rally, where BTC experienced a 200% surge in just four months followed by a year-long stagnation and a sudden 70% price crash, as an example of why rapid rises can be detrimental to the cryptocurrency's stability.
Vays believes that if Bitcoin were to break the $35,000 resistance level on its first attempt, it could lead to similar negative consequences, as the crypto may not have had enough time to build a stronger base capable of withstanding sell-offs. But if BTC breaks this level in the coming months, Vays predicts a potential rally to somewhere between $50,000 and $60,000.
Read Next: The House-Printing Robot Shaking Up a $7.28 Trillion Industry
The recent regional banking crisis has resulted in people flocking to crypto and blockchain-based assets as a means to secure liquidity for their businesses and as investments. For example, Gamestop Corp. has seen a recent surge in volume on the platform, with some assets volume growing over 20,000%. In the startups market, retail investors have invested over $900,000 in Gameflip for their digital asset and NFT marketplace.
Vays is a former Wall Street trader who emerged as a leading figure in the cryptocurrency world. With nearly a decade of experience as a risk analyst at Bear Stearns Cos. Inc. and later as vice president of JPMorgan Chase & Co. after the 2008 crisis, Vays entered the world of cryptocurrency in 2013, focusing mainly on Bitcoin and studying the asset from both a financial and technological perspective.
Events of 2019: Bitcoin experienced a roller coaster ride of events in 2019 that impacted its price and raised questions about its use and regulation.
- In early October, Russia's enactment of a new digital rights act that defined smart contracts and cryptocurrency tokens was seen as a potential step toward regulating the space, despite the country's reluctance to fully embrace cryptocurrency.
- Cumulative Bitcoin transaction fees surpassed the $1 billion milestone in mid-October.
- Bitcoin's association with the dark web made headlines after German police raided a data processing center allegedly hosting sites dealing in drugs and child abuse imagery. Meanwhile, Ohio, the first U.S. state to accept Bitcoin for taxes, suspended its cryptocurrency payment system.
- A South Korean man was charged with running the world's largest child sexual exploitation market, with transactions worth over $730,000 in Bitcoin.
- Johannesburg, South Africa, was targeted by Bitcoin-hungry hackers, who demanded payment of more than $30,000 worth of the cryptocurrency.
The impact of the pandemic: Then came COVID. At the onset of the pandemic in early 2020, the global economic downturn resulted in a decrease in the value of traditional assets such as stock markets. This created a surge in demand for Bitcoin as a safe haven asset, driving up its price significantly in the first few months of the pandemic. By mid-May 2021, the price of Bitcoin had reached a peak as a result of this increased demand.
To stay updated with top startup news & investments, sign up for Benzinga’s Startup Investing & Equity Crowdfunding Newsletter
Uncharted territory: Cryptocurrency is becoming increasingly attractive to investors as traditional banking institutions struggle to remain viable in the wake of two major collapses. Since then, digital currencies such as Bitcoin and Ethereum have seen a rapid surge in their values as investors seek safe havens for their assets. This growth has been further fuelled by speculation that cryptocurrencies could represent a fundamental shift away from traditional banking methods, allowing users greater control and transparency over the management of their finances.
But does the current Bitcoin resurgence indicate that the cryptocurrency hit its bottom and it’s only up from here? Or is it simply a temporary bounce before another decline?
The recent upswing in prices has been a welcome relief, but with global politics, rising inflation and the Federal Reserve's interest rate policies all in flux, this is uncharted territory. Those experienced with the market understand that predicting the short-term value of digital assets is a difficult task, but in this highly volatile market, the challenge is even greater.
See more on startup investing from Benzinga.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
