The price of Bitcoin faced a massive correction in recent days with the crypto plummeting as much as 6.7%, on March 25, and posted a 24-hour low of $ 50,623.90. Additionally, the asset’s price is down roughly 17% since its last ATH of $ 61,711.87 this month. The current price drop has been thought to be due to the expiration of $ 5 billion options in Friday.
But according to the Forbes Crypto head of research Steven Ehrlich, there are several reasons why explain the recent volatility of Bitcoin. Talking to Jill Malandrino, Ehrlich of the Nasdaq Trade Talks program explained that some institutional investors who have bought the crypto asset are now cashing in on their holdings for profit.
The analyst stated that a “bigger concern” for the Bitcoin markets was the fact that central banks are raising interest rates. Crypto, which is often seen as a hedge against inflation risks, is now being traded more as a “risk asset.”
Ehrlich admitted that he remains bullish on Bitcoin at least in the long term. However, he warned that in the short term, Bitcoin may have a “small correction” and may even have periods of “side trading.”
Interestingly, Bitcoin has gained 679.5% over the year, while Ether is up 1066.9% in the annual time period. When asked why the largest altcoin outperformed Bitcoin last year and is on track to perform better again in 2021, Ehrlich revealed two reasons.
He said that lately, Ether has been gaining importance among institutional investors who continue to show interest in ETH. For example, Meitu, a Chinese tech company recently added $ 17.9 million in Ether (and $ 22.1 million in Bitcoin) to its balance sheet.
Also, since NFTs have received more attention, this could further boost Ether prices, as most tokens are based on Ethereum. The platform is also the preferred choice for various DeFi projects. As the sector of the decentralized economy continues to grow, with more than $ 38 billion At full locked value, Ether could continue to rally.
Sign up for our Newsletter