Anna Hartz
The world’s largest cryptocurrency has gone through several boom-and-bust cycles.
For years, Bitcoin has attracted investors with its sharp price swings and the promise of big returns. Now, after another period of losses, many investors are once again asking where the market is heading next.
Concerning movements in crypto
Bitcoin has been under pressure in recent weeks despite still trading at a high price. One Bitcoin is currently worth around $62,200, according to DR. That is close to 400,000 Danish kroner. Even so, the overall trend has been negative.
Over the past 24 hours, Bitcoin has gained about 2.7 percent. However, the digital currency has fallen more than 15 percent over the last week.
According to Mads Eberhardt, a cryptocurrency analyst at Nordic crypto exchange Firi, recent concerns have been linked to US company Strategy. Strategy owns nearly 850,000 Bitcoins and is best known for constantly buying more. Last week, it sold 32 Bitcoins. Although the amount was small, the move created uncertainty among investors.
Per Hansen, investment economist at Nordnet, says many investors are worried that Strategy could continue selling parts of its massive holdings. That concern has added pressure to the market.
Still, analysts agree that the recent sale cannot explain the entire decline. Bitcoin has been falling for much longer. The cryptocurrency has lost 22 percent over the last month and 31 percent over the past six months.
Investors have their eyes on tech stocks
One year ago, Bitcoin traded at around $104,000. Compared with that level, its value has dropped by roughly 41 percent.
Hansen believes many investors are moving their money into technology stocks instead. He says Bitcoin and tech shares are often viewed as investments with similar levels of risk.
Eberhardt agrees. He says investors naturally shift toward assets that are performing better.
Both analysts also point to the upcoming SpaceX stock market listing on June 12. Some investors are selling risky assets to free up money for that event.
Despite the recent losses, Eberhardt remains optimistic about Bitcoin’s future. He notes that banks such as Danske Bank and Nordea have expanded access to Bitcoin-related investment products.
He also expects new US cryptocurrency regulations to strengthen confidence in the market.
Hansen is more cautious. He says Bitcoin remains a highly risky investment and its long-term value will depend on whether it becomes widely used as a practical payment method.
