If you are into trading cryptocurrency then you cannot afford to miss the action even on weekends, CNN reported.
The unthinkable happened on Saturday night- bitcoin plunged steeply around 14% in less than an hour. The crash came after a week full of hype and hoopla in which it hit a record high of almost $64,900 last Wednesday then sinking to lows of around $51,000 but recovering to above $56,000 later.
Cryptocurrency Trading – A 24X7 High Stakes Game
Bitcoin has been on fire since November, logging massive gains as financial institutions and companies like Mastercard, Tesla, and BNY Mellon backing the cryptocurrency all the way. Bitcoin received an added boost with the listing of cryptocurrency exchange Coinbase last week which signaled widespread acceptance by investors.
Galaxy Digital founder Mike Novogratz tweeted, with hindsight, it was inevitable. He added the direct listing of Coinbase had generated too much excitement.
Even digital currencies like Dogecoin that started as a parody, had hit new highs. He said it indicated that the market had gone one way too far.
According to Novogratz, Crypto backers would be fine in the medium term as institutions were moving into the space, they would likely find the ride bumpy in the short term.
There was also the increased regulation factor that would be seen as a threat working to rein in rise of the cryptocurrency.
According to a note to clients by Jim Reid of Deutsche Bank, it was difficult to work out exactly what was behind the sudden reversal, but according to the online chatter it was linked to speculation about the US Treasury gearing up to act against money laundering using digital assets.
Competition was also set to increase as authorities tried crypto coins backed by states.
According to commentators, China had been pushing ahead with its experiment in introducing a digital yuan and offering foreign visitors and athletes an opportunity to use it during the 2022 Winter Olympics in Beijing.
Li Bo, a deputy governor, People’s Bank of China said on Sunday that the digital currency pilot was well on track following its launch in four cities, and the Winter Olympics’ venues. He added, the experiment had since been expanded to cover 10 cities or provinces with 100 million people.
Meanwhile, according to commentators, all the turbulence of the last week apart, the latest crypto mania round might not be over just yet. Dogecoin was up 35% in the past 24 hours, acquiring almost $54 billion market value.
They added with cryptocurrency trading on 24/7, more dramatic weekends could be in the offing.
Meanwhile, CNBC reported that China’s central bank now saw bitcoin as an “investment alternative”, in a significant shift from its stance when it launched a crackdown on cryptocurrency trading and issuance around four years ago.
Industry insiders termed the comments “progressive” and are watching for regulatory changes by the People’s Bank of China (PBOC).
Bo said on Sunday’s Boao Forum for Asia hosted by CNBC that the bank regarded stablecoin and Bitcoin as crypto assets. He added these were investment alternatives.
He added they were not currency per se and so the main role the bank saw for crypto assets going forward was as an investment alternative.
In 2017, however, China had banned the so-called initial coin offerings (ICOs), a way for crypto companies to raise money through the issuance of digital tokens. Authorities later that year local cryptocurrency exchanges were shut down by authorities. According to commentators, the moves were prompted by financial stability concerns.
Li said, as investment alternatives, China along with many countries were still looking into it and considering the regulatory requirements around them. He added they may be minimal but regulatory requirements to prevent speculation creating any serious financial stability situation.