Bitcoin price drops as venture capitalist sticks to $ 250,000 forecast
Bitcoin fell below $ 40,000 (£ 28,410) on Tuesday morning, even as a survey showed hedge fund interest was on the rise and billionaire venture capitalist Tim Draper mentionned he sticks to his prediction that the cryptocurrency will reach $ 250,000 by the end of 2022 or early 2023.
Bitcoin (BTC-USD) was down 1% and trading at $ 39,717 per day after receiving a boost as US hedge fund mogul Paul Tudor Jones and Tesla boss (TSLA) Elon Musk have thrown their weight behind bitcoin, although it is still not close to its all-time high of around $ 63,000, which it hit earlier this year.
“Bitcoin is at its highest level since May, a notable rally, but the cryptoasset has yet to convincingly – and most importantly, close above – the $ 41,000 mark,” Simon said. Peters, crypto-asset analyst at the eToro multi-asset investment platform.
“We saw the price face resistance earlier in the year at this level as it traded around what was then an all-time high, and I would really need to see a bigger rise to be optimistic about price recovery and possibly pushing over $ 50,000 and beyond.
Meanwhile, the Financial Time reported Tuesday that hedge funds plan to increase their exposure to cryptocurrencies by 2026, citing an investigation by fund administrator Intertrust.
The publication said it was “a major vote of confidence for digital assets after recent sharp price drops and plans for new punitive capital rules.”
The most recent example is a leading global banking regulator that offers tough rules for cryptos that could make them expensive for banks, and places bitcoin in its highest risk category.
Read more: New rules could make crypto extremely expensive for banks
The report also states that “the growing enthusiasm for hedge funds contrasts sharply with widespread skepticism among more traditional asset managers, many of whom remain concerned about the huge volatility and uncertainty in cryptocurrencies over the future. how they will be regulated “.
The FT report comes as the Bank of America’s (BAC) long-running survey of fund managers shows that most professional money managers still think bitcoin is a bubble.
Earlier this morning, Naeem Aslam, chief market analyst at Ava Trade, said, “Investors should be watching bitcoin’s performance closely, as traders have finally built bullish momentum.
“The bitcoin bulls are trying to regain control and the hope is that we will finally see the price of bitcoin move closer to the $ 50,000 mark.”
“We really think in the next few days we’re going to hear from miners that most of the energy used for mining is light energy. Such a development… is quite possibly the next bitcoin price catalyst to start his next bull run, ”he added.
It comes amid many concerns about the carbon footprint of bitcoin mining.
Watch: What are the risks of investing in cryptocurrency?
Read more: How bad is bitcoin for the environment?
Meanwhile, bitcoin received a boost when El Salvador accepted it as legal tender.
Tanzania is the latest emerging economy to adopt crypto following El Salvador’s announcement. Several other countries have also made noise, including Panama, Mexico, Venezuela, Brazil, Nicaragua, Argentina and Malta, ”said Alexandra Clark, trader. at UK-based digital asset broker GlobalBlock.
“The wave of adoption by companies and countries is raising awareness and forcing other more reluctant actors to act. This is especially true among pension providers and wealth managers,” he said. she adds.
Watch: What is bitcoin?