Bitcoin fell below $30,000 on Tuesday for the first time since January after a difficult week in which the cryptocurrency has lost nearly 30 percent of its value.
For the past week, traders have been grumbling about the “death cross”, hashrate, and the Chinese province of Sichuan. But committed crypto enthusiasts tell DealBook that the big picture is more promising than ever.
The falling price of bitcoin has stopped technical pattern Called a death cross, in which the 50-day moving average crosses below the 200-day average. Some chart watchers think it denotes trouble – hence the ominous name.
In addition to the price drop, there has been a significant drop in processing activity on the bitcoin network. The hashrate, a measure of computing power devoted to processing the cryptocurrency, has fallen sharply, which many believe is related to Chinese authorities. cracking down On huge computer farms that “mine” the currency in areas like Sichuan, where hydropower is plentiful. China’s central bank also said on monday That he had called on banks and fintech firms to remind them that crypto trading is prohibited in the country.
The more important long-term trend, however, is the gradual mainstream adoption of cryptocurrencies, said Matthew Siegel, head of digital asset research at investment manager VanEck. Goldman Sachs is now bitcoin futures trading, and the bank has recently published 60 page report On the viability of digital assets.
But regulatory hurdles remain significant. VanEck’s application for bitcoin exchange-traded funds in the United States was second time delayed Last week. (Mr. Siegel declined to comment on the application.) These vehicles, which already do business in Canada and parts of Europe, will expand the scope of potential investors’ exposure to crypto. Some regulators and industry insiders believe it is only a matter of time before it is allowed in the United States.
and beyond financial institutions, government adoption Bitcoin by El Salvador may finally prove that crypto is what its proponents have long proposed: a tool to democratize finance. although Some bitcoin enthusiasts are critical Regarding the hastily adopted Salvadoran law to make bitcoin legal tender, Mr. Siegel said it gave the country’s mostly unaffiliated population a new option and promoted technological innovation, like other countries encouraging green energy with subsidies. We do.