Reshab AgarwalBitcoin’s prices seem to be stuck between $45,000-$50,000. This happened after Elon Musk tweeted saying that Bitcoin and Etherium prices do seem high. And along with the falling prices of Bitcoin, Grayscale Bitcoin Trust, the world’s largest Bitcoin fund, has also gone down by 20%. It has also resulted in the fund losing its premium and is now actually discounted compared to BTC. While the price of Bitcoin was going up, there was a considerable premium added to GBTC’s holdings. But now the premium is gone, and the price is actually 0.7% below its holdings.
The reduced price of GBTC is not due to panic selling or any other reason. It is basically due to the fact that GBTC’s price is a direct reflection of Bitcoin’s price, and as it goes down, so does GBTC. It is also the reason that the fund is losing its premium.
Bitcoin is struggling!
No doubt that Bitcoin is still going to go up and continue its rally in a while, but as of now, it’s struggling. The prices have already fallen from $58,000 to currently $47,000, which is more than 15% in just a few days. I think retailers are panic selling, and big whales are buying in. For Example, just the day before yesterday, Microstrategy invested $1 billion in Bitcoin at an average purchase price of around $52k.
Image Source: Bitcoin News
At the same time, there has been heavy selling going on too. And that has resulted in the price drops that are happening. This is most probably the cool-off that’s happening after the constant rally. The market is shedding off all weak investors, and only those who can hold will buy-in. This had also happened at the $35k mark when the price was fluctuating between $30k-$40k for quite some time.
Should you invest in Bitcoin now?
Well, I am not a financial advisor, so you should do your own research before making any such decision. But here are my views on the same. I think yes, it is a perfect time to invest in cryptocurrency. Bitcoin has already tested levels above $55k and is currently sitting more than 10% below that. And just a little momentum will be good enough to push the price where it should be. Another reason to consider investing in Bitcoin is inflation.
With the government printing trillions of dollars every year, Inflation is eating up your money. And investing in Bitcoin can help prevent that. The growth rate of the currency is so huge that it cripples inflation and acts as a hedge. I believe in the future of Bitcoin, and so I could sound biased, but once you learn about it, I think you would feel the same way too.
What are your thoughts on the Grayscale Bitcoin Trust losing value so quickly? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.
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