The Risk of Bitcoin’s Bullish Expectations
The bullish expectations for Bitcoin (BTC), the world’s first digital currency, may be difficult to meet as market realities set in. Bloomberg Intelligence Senior Macro Strategist, Mike McGlone, warns that the assumption of “It Went Up, So Will Keep Going Up” may be placing undue pressure on the premier cryptocurrency.
Main Breakdowns:
- Lessons from high-performing assets show price reversion as a greater risk once the masses join in.
- Bitcoin’s performance has waned since hitting its All-Time High (ATH) above $69,000.
- Comparisons are made to the growth pattern of Amazon, suggesting that Bitcoin can still maintain its performance rating with price consolidation.
- Bitcoin’s profitability can be sustained even if the price slips to $10,000 in the near term.
- The future growth of Bitcoin is dependent on potential approval of spot Exchange Traded Fund (ETF) products by the US Securities and Exchange Commission (SEC).
The approval of a Bitcoin ETF is projected to have a positive impact on the digital currency’s price. However, experts believe that the chances of approval are low.
Hot Take
While Bitcoin has been the darling of investors, the risks associated with its bullish expectations are starting to become evident. Price reversion and the need for regulatory approval for ETF products are challenges that may impact Bitcoin’s future performance. It remains to be seen whether Bitcoin can maintain its profitability and reach new highs amidst growing expectations and market realities.
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