For bitcoin, it’s just business as usual. Crypto investors have come to accept that bitcoin is volatile.
The total number of bitcoins now in circulation have a market value of $1.1 trillion. That’s nearly half of the size of the entire crypto market, which is valued at $2.47 trillion.
Ethereum, sort of the Pepsi to bitcoin’s Coke, is worth about $475 billion. All the other cryptos are worth significantly less than bitcoin and ether.
The ProShares ETF already already has more than $1.2 billion in assets under management. The new found popularity of bitcoin ETFs, which track bitcoin futures and do not give individual investors ownership of actual bitcoins, should push the price of bitcoin even higher over the long haul.
But there are signs that some traders may be souring on bitcoin and other cryptos. An asset price can’t go up this sharply indefinitely. And bitcoin prices, even after this week’s drop, have still more than doubled this year.
Deeper corrections and bear markets are inevitable. The big swings in bitcoin prices during the past few days may be just the beginning.
“We do expect bitcoin to hit $100,000 in the future — but not this year, as we expect volatility to continue into early 2022,” said Gavin Smith, CEO of Panxora, a cryptocurrency investment consortium, in an email.
“Bitcoin is still an emerging asset class subject to very high volatility and investors should approach it with caution. Care should be taken and any investment should be considered speculative,” Smith added.