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Summary
- After the recent sell-off, bitcoin rallied this week and topped US$40,000 for the first time since June.
- Amazon has denied news reports about its plans to accept cryptocurrencies.
- In April, bitcoin set a record of nearly US$65,000.
This week is turning out to be an eventful one for the world’s largest cryptocurrency. After the recent sell-off, bitcoin rallied this week and topped US$40,000 for the first time since June. The major catalysts for this surge emerged from the B-Word conference, where Tesla CEO Elon Musk and Twitter CEO Jack Dorsey announced their bullish crypto views.
During his speech at the event hosted by the Crypto Council for Innovation, Musk said that Tesla would again start accepting bitcoin for vehicle purchases. Similarly, Twitter and Square CEO Jack Dorsey also shared Musk’s hopes that bitcoin helps create world peace.
However, the largest cryptocurrency by market value soon retreated after US retail giant Amazon denied a news report that said it was preparing to accept cryptocurrencies.
Source: © Aoutphoto | Megapixl.com
Does the recent surge raise hopes for Bitcoin?
It’s difficult to speculate whether the brief rally signals bright days ahead for the popular digital currency. But American companies have shown a persistent interest in the digital currency.
While Amazon may have denied plans to accept cryptocurrencies, it’s looking to add a digital currency and blockchain expert to its payments team, according to a recent job posting.
READ MORE: What’s driving the crypto rally?
Will Bitcoin price top US$50,000 in 2021?
On 16 February, Bitcoin broke past the US$50,000 level and in April, the crypto went on to set a record of nearly US$65,000. But the prices continued to slip thereafter due to a couple of major reasons. First one was a tweet by Musk saying that Tesla would not purchase more Bitcoin for its treasury due to concerns over the environmental impact of mining the cryptocurrency.
The other reason was China's crackdown on Bitcoin miners. The Chinese government also issued subsequent warnings to fintech institutions and banking institutions.
The tumble came at a time when the broader stock markets across the world were trading on a volatile note. Cryptocurrencies provide an option to investors during such times. However, weak performance by digital currencies during such a time has dimmed its prospects as of now.
READ MORE: Which are the five best performing cryptos of 2021?
The returns for bitcoin have been muted compared to the S&P 500, estimated at 15% till date for 2021. Having fallen below US$30,000, Bitcoin offered returns of nearly 2%. Such low returns don’t bode well for bitcoin when investors are looking for risky assets for higher returns.
Source: © Josefkubes | Megapixl.com
All is not bad for bitcoin
Despite top cryptocurrencies crashing, there are a few who continue to have faith in cryptocurrencies.
One such person is billionaire venture capitalist Tim Draper, who recently reiterated his stand that bitcoin will reach $2,50,000 by the end of 2022 or early 2023.
A recent report titled, ‘Rising Bitcoin Adoption Tide’ by Bloomberg Intelligence also mentioned that bitcoin’s technical outlook remains strong, and its price is expected to rise nearly 600% US$400,000 level in 2021.
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