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Boom and bust - Has Bitcoin finally risen?

 

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Price discovery has become easier, investors have become more professional, and the hype around all things 'cryptocurrency' has subsided. While volatility is expected to remain the dominant driver of price movements in the future, it may well be that the boom and bust era of cryptocurrency is now firmly in the past.

Financial markets - boom, bubble and bust
The cryptocurrency market is maturing - the hype has fallen
Technical analysis gives a clearer picture of prices and trends

What does the future hold for bitcoin?

Boom and bust - financial market mania
Throughout history there has been a pattern of financial market mania and asset bubbles, where fortunes were made and lost in short periods of time, sometimes without any fundamental basis for these moves. From tulip mania in 1637 to the collapse of the US stock market and the subsequent depression in 1929 to the boom and bust of cryptocurrencies in 2017-2018, prices have risen and fallen to the point that rational investing and exiting these markets has become increasingly urgent. Investors are encouraged to invest in these markets for fear of missing out on an opportunity and then find it difficult to sell their positions when everyone exits at the same time.

A brief history of major financial bubbles, crises and sudden collapses 

The cryptocurrency market is becoming mainstream
One of the main drivers of the Bitcoin price boom has been the huge media interest that has arisen around the cryptocurrency sector. As Bitcoin searches on Google peaked, so did the price, bringing it to a record high of around $20,000. When a sharp sell-off followed, media interest in Bitcoin began to wane and then fell along with Bitcoin's fall to $3,200.

It is likely that many participants left the cryptocurrency market during this sharp drop due to the significant losses combined with the fact that inexperienced traders are less likely to trade on the short side of the market, especially after previous sharp profits. . Inexperienced traders are more likely to "buy on the downside", exposing themselves to severe vulnerability and risk in a bear market.

The bitcoin network was launched in January 2009 - more than a decade ago - and now trades around the clock, seven days a week on various trading platforms, both regulated and unregulated. This separation has made it difficult to accurately price bitcoin and most other cryptocurrencies, as some exchanges have preferred different time zones and customer bases.

As the cryptocurrency space became more popular with investors, trading exchanges became more advanced, offering better price discovery and history on portal Exness Mt4 Terminal Download, making technical analysis easier and more accurate. Again, the maturity of the market has also helped to attract more professional investors, who ignore the short-term hype and noise and invest on a longer-term basis. There are also many bitcoin-ETFs awaiting regulatory approval, which will make it easier to invest in bitcoin in a liquid and secure form.

The future of Bitcoin - a more tradable asset class
With the frenzy and extreme volatility leaving the market, and with price discovery and access becoming clearer and easier, Bitcoin as an asset class continues to evolve. Other cryptocurrencies still struggle to gain investor acceptance - Bitcoin currently dominates the market by more than 65% - but could eventually follow the market leader. Until then, however, Bitcoin will not only remain the main traded cryptocurrency, but also increase its presence in the financial market. Volatility will remain, but price/interest movements will not be as large and abrupt as before, as a more mature market with increasingly mature investors helps Bitcoin come of age.

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