Bitcoin and ace digital tokens have gained as much as 30 per cent in the last seven days. The cryptocurrency hit the $40,000 mark on Wednesday and investors have set their eyes on $50,000 as the next target.
Analysts have varied opinions on Bitcoin and other digital tokens. However, they say investors should not fall prey to market cycles. Their long-term bullish view remains intact.
“If you believe in the Internet with its own money and governance, then the industry is just getting started,” said Siddharth Menon, COO, Wazir X. “Bitcoin could play a significant role as adoption goes up. Many institutional investors are getting greedy.”
However, they also have a word of caution for the new age investor.
Edul Patel, CEO & Co-founder, Mudrex, advises crypto investors be prudent in differentiating greed and fear in the financial markets.
“The recent rally has lured several inexperienced retail investors and traders into the markets, who have joined the frenzy to make a quick buck. However, they may get trapped if the larger players keep dumping,” he cautioned.
Market watchers are worried over the sustainability of this bull market. The crypto market is on a roll, despite weaker volumes. This suggests the party may get over soon, said market watchers.
There are multiple halts after a quick rally. Patel of Mudrex is advising investors to be extra-cautious in such markets and keenly track the volumes for further upside.
However, healthy corrections are good for the market as they give investors a decent opportunity to enter the markets. Bitcoin rose to $40,700 from $29,600 in just 10 days. Investors are now expecting $50,000 level, which is further 20 per cent up from current levels.
“The brief halt was more of market cycle correction after having a month-on-month bull run since March 2020. The $50,000 level could be a local top in a few months, but in a longer time period, the sky’s the limit,” said Menon.
Several analysts have predicted that Bitcoin could hit the $150,000 mark by 2022. However, Bitcoin is trading about 35-40 per cent down from its all-time high of $64,865.
“There are certain significant upgrades in the pipeline for both Bitcoin and Ethereum. These are expected to roll out by the end of this year, which can be game changer of the top crypto tokens,” said Patel of Mudrex.
Changpeng Zhao, CEO, Binance, is bullish on Bitcoin in the long run as a store of value and its potential to change the world for the better.