Bitcoin price back below $30,000 level, but traders stay bullish

Bitcoin price slipped back below the $30,000 level after hitting a low and a high of $29,298 and $31,919.70, respectively, over the last 24 hours. The world’s oldest and the biggest cryptocurrency pared some of the losses and was trading at $31,166, down 1.88% at around 1 pm (IST) on Thursday, as per data available with crypto exchange WazirX.

The second-biggest cryptocurrency in terms of market capitalization, ethereum, was also trading lower by 1.74% at $1,283.79. Other major crypto assets such as ripple and tether were 2.71% and 0.08%, respectively, in the red. However, stellar was marginally in the green.

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“We saw bitcoin price slipping to the $30,000 level, and interestingly, traders are very bullish about it. Moreover, in the past 30 days, almost 270,000 bitcoins have moved to people who are looking to hold for long period. This has also led to a depletion of its liquidity. We also saw Switzerland’s largest bank UBS released guidance on investing in bitcoin. These are early signs of banks entering into the crypto market. We saw 2020 bringing in Institutional investors into crypto, and I am optimistic that 2021 and 2022 will bring in the banks,” said Nischal Shetty, chief executive officer, WazirX.

Blackrock, the world’s largest asset manager with $7.81 trillion under management had recently authorized two of its funds to invest in bitcoin futures, while US banking major, Goldman Sachs, is also considering entering the crypto market.

In a recent report by the US-based ARK Investment Management LLC, the bitcoin’s market and investors appear to be maturing. “Bitcoin’s realized capitalization, a measure of a holder’s cost basis, has hit an all-time high. A growing cost basis suggests that early investors are taking profits, while newer investors are establishing positions and creating higher price support levels,” said the AMC, which manages around $34.5 billion in assets.

The fund house in its report titled ‘Big Ideas 2021’ said that with bitcoin appearing to gain more trust, some companies are considering it as cash on their balance sheets. “If all S&P 500 companies were to allocate 1% of their cash to bitcoin, ARK estimates that its price would increase by approximately $40,000,” it added. This would take the bitcoin price to above the $70,000 level.

According to ARK Invest, as of November 2020, roughly 60% of bitcoin’s supply had not moved in more than a year, a testament to the market’s longer-term focus and a holder base with stronger conviction.

The fund house also estimates that the market capitalization of bitcoin could scale $1-5 trillion during the next five to ten years.

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