Bitcoin Nosedives Below $30,000

Digital currency Bitcoin crashed 15 per cent on January 4, after advancing as much as 50 per cent since December 2020. A day after surging past USD34,000, the cryptocurrency plummeted sharply by USD6,000.

Bitcoin slumped to USD29,316 this evening on Monday, down 12 per cent in the last 24 hours. However, it soon bounced back to the $30,000 level, still down by some 9 per cent.

In 2020, the world’s biggest cryptocurrency by market value, Bitcoin had experienced an upward rally, surging as much as 300 per cent. It had achieved the milestone of reaching USD 20,000 in December.

Experts said that the drop was not so unusual for an asset as volatile as Bitcoin. The most likely explanation is a short-term profit taking by traders, rather than by long term investors. They feel that the surge and appetite for Bitcoin would be short-lived.

Since its launch in 2009, Bitcoin has seen its price range from $0.0008 to nearly $30,000 now amid hopes of becoming a dominant medium of exchange of the future.

In 2020, Bitcoin had fallen 25 per cent in March amid the Coronavirus crisis.

The main reason behind the rise of Bitcoin could be bulk buying by big US investors. They expect to make quick gains amid some positive developments around the cryptocurrency, including speculations that it could become a mainstream payment method. The popularity of the digital currency could be attributed to the fact that PayPal enabled its account holders to use Bitcoin.

Meanwhile, Ethereum, another cryptocurrency similar to Bitcoin, gained 465 per cent in 2020.