- Bitcoin is trading just below $40,000 at press time, dipping by over 6 percent in the past day and dragging down the entire market with it.
- However, belief in BTC’s future is unwavering as Michael Saylor says he’ll never stop buying and Okcoin CEO says BTC is still the best hedge against inflation.
Ever since it hit a local high at $48,000 three weeks ago, Bitcoin has been steadily dipping and at press time, it’s trading just below $40,000, losing over 6 percent in the past day. This form has dragged most cryptocurrencies in the top 50 down as well, but if there’s one thing Bitcoin has not lost is the belief of its holders who still tout it to be the best investment and hedge against inflation.
At press time, BTC is changing hands at $39,900, dipping by 6.08 percent in the past 24 hours. In that time, it set an intra-day high at $42,548. Its trading volume has seen a 31 percent spike to hit $42.6 billion which is in stark contrast to its price form.
Most analysts believe that Bitcoin’s performance is now no longer limited to micro factors but rather, it’s more dependent on the macroeconomic factors that affect other assets as well.
“These assets will not be immune to macroeconomic forces, including central bank monetary tightening,” Goldman Sachs summarized in a recent note.
One of the most recent is comments by Fed chair Jerome Powell in which he claimed that the Fed was taking inflation extremely seriously and would rein it in at any cost.
Such Fed tightening doesn’t bode well for cryptos and other risky assets such as stocks.
But then again, Bitcoin has something that stocks and other such assets do not – a legion of diehard fans who are not shaken up by small dips. Despite being over 40 percent below its November all-time high, BTC still gets the same belief from its supporters.
Okcoin CEO Hong Fang is one such believer. In an interview with Fox Business, Fang stated that volatility in the crypto market is expected, especially since the market is more responsive to factors such as Powell’s comments on inflation.
It’s hard to see where it’s [Bitcoin] going short-term but I still believe that it’s a strong inflation hedge particularly as we see the inflation risk going on in the last 12 months.
She believes that in the mid-term to long-term, the bulls will emerge victorious, boosted by BTC’s growing usage as a store of value.
Other Bitcoin bulls have continued to tout BTC as the best investment, none more so than Michael Saylor, the Microstrategy CEO who has become as famous for Bitcoin as he is for his business intelligence software firm. On the sidelines of the Bitcoin Miami conference, he stated:
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Why would we ever stop [buying BTC]? As we generate cash flows, we think that the responsible thing to do for our shareholders is we convert currency which is devaluing, into an asset which is appreciating,