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Bitcoin Falls 50%. Now What? Will the Cryptocurrency “Resurrect”?

Bitcoin Falls 50%. Now What? Will the Cryptocurrency “Resurrect”?

The attacks by Elon Musk and Beijing have not spared Bitcoin. The “cryptoqueen” has fallen 50% in the last week, 30’% in one day. Today, the world’s most quoted digital currency suffered a 12.46% correction to €31,284.51.

This week, the “crypto fear and greed index”, an index that measures fear and expectation of profit in relation to Bitcoin – where 100 represents full confidence – fell to 11, down sharply from 90 in January.

However, for some economists all is not lost: “The large drops in valuations this week are healthy, because they allow the market to offset excess speculation and consolidate the next phase of expansion,” argued Anatoly Crachilov, an executive at investment firm Nickel Digital, in a statement to ‘Forbes’.

“Bitcoin has already experienced this pattern several times. This is not the end, the market is just maturing,” Crachilov clarifies.

Varit Bulakul, president of the investment bank and digital assets Brooker Group, shares the same opinion: “This fall is the short-term correction of an expanding market,” he argues.

“On the other hand, this drop exposes a clear problem felt by many investors: More investment diversity is needed, you can’t just invest in Bitcoin, you need to invest in other crypto-assets, regardless of the success of this currency,” Bulakul adds, in an interview with Reuters.

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“In the last two quarters we have seen an unbridled rush of cryptoactive, so this pullback is not surprising, or even negative, but a consolidation phase, for new growth,” stresses Pete Humiston, director of Kraken Intelligence, quoted by the British agency.

For Mathew McDermott, director of the newly formed Goldman Sachs digital asset management office, “Bitcoin is now recognized as an asset worth investing in. Although with a risk of its own, partly because it is still relatively new, it will eventually recover albeit slowly.”

At the end of 2017, Bitcoin began a cascading drop of almost 90% to €16,380, recovering months later and reaching a record price of €58,000 in March.

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