Bitcoin might collapse! Yes, we have seen it happen before; it might happen yet again. JPMorgan strategists have said that unless Bitcoin reached $40,000, there is a big chance of its collapse. And if it does, there might be yet another boom, and we may see new highs again. The cryptocurrency has already been showing huge swings and fell by 25% on 10th January 2021. This fall happened in a time span of just 24 hours. And even though the prices of the currency since then have recovered, it hasn’t reached $40,000 again.
Why might Bitcoin collapse?
The price of any current or shares is driven by its demand. And since currently Bitcoin isn’t particularly making any new highs, retail investors, in particular, are backing out. Now unless the currency reaches the $40,000 price point again, the demand factor that was driving the price of the currency might not be seen again. So there might be a price crash! One of the Bitcoin trust also commented on the theory given by the JPMorgan strategists. They said that unless there is at least $100 million worth of transactions in Bitcoin every day, it is impossible for the currency to reach $40000 again.
Another factor that I think works here is the fear factor. Note that Bitcoin collapse in 2018 too, and a downside in its price will trigger fear among investors, which is natural. And if retailers begin to exit, it won’t be a great thing for the currency. On Jan 8th Bitcoin was trading at $42000, and by 11th Jan, it reached $30,000. I am glad even after such a huge price crash; the currency did not fall even further. Investors are also looking to make a quick buck because they don’t think that the Bitcoin prices right now are sustainable. All this concerns me that, yes, a Bitcoin price collapse might just be around the corner.
It is very difficult to take about something that no one knows about. But, let’s take a look at the points. Bitcoin is still not accepted everywhere in the world, and it is not a mainstream currency yet. People are still viewing it as a medium to make quick money and not as an actual currency. And lastly, every time a Bitcoin rally has occurred with multiple folds of price increase, it was followed by a massive crash only sometime later. So, yes, the future of Bitcoin is uncertain. But does that mean one should not invest in the same? Heck, No! the greater is the risk, the bigger the reward. And so one can surely bet on the currency and take a shot at being rich.
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