Crypto Market

Why did the price of bitcoin “crash”?

Just a few hours ago, bitcoin (BTC) seemed destined to reach $110,000. But as of today afternoon, December 18, its price is approaching $100,000.

This occurs despite the fact that the Fed (central bank of the United States) has cut interest rates just as the market expected (which is usually bullish news for bitcoin).

The following chart, provided by CoinGecko, shows the price of bitcoin over the last week:

Bitcoin price in the last 7 days. Source: CoinGecko.

What happens is that, as CriptoNoticias reported minutes ago, The president of the Fed—Jerome Powell—declared that the institution he represents cannot hold bitcoin.

Powell clarified that he is not seeking to keep BTC in the Federal Reserve and that this is an issue that should be addressed in Congress.

Such statements are given in the context that donald trumppresident-elect of the United States, He has promised to create a strategic national reserve in bitcoin when he is president.

Obviously, Trump’s promise does not have an easy path to fulfillment, but will have to navigate legislative debates.

Every drop is a buying opportunity

Despite the recent volatility and “crash” that has taken bitcoin towards $100,000, expectations for 2025 remain overwhelmingly bullish.

First, let’s consider the post-halving history of bitcoin. Each bitcoin halving, which occurs roughly every four years, halves the reward miners receive for adding a block to the network, which inevitably reduces the new supply of bitcoins in circulation.

Historically, after each halving event, bitcoin has experienced periods of correction followed by a significant increase in its price that peaks the following year. The most recent halving occurred in April 2024. So, following this idea, 2025 should be a bullish year if history repeats itself.

Scarcity is another key factor. Bitcoin has a limited supply of 21 million coins, of which more than 19 million are already in circulation. This inherent scarcity, combined with growing institutional and individual demand, acts as a catalyst to increase the price in the long term. The “digital gold” narrative is strengthening, positioning bitcoin as a haven of value and an alternative to the traditional financial system, especially in times of economic uncertainty or inflation.

Besides, Donald Trump’s promise to create a strategic national reserve in bitcoin It could, despite legislative difficulties, signal broader recognition of bitcoin by influential political figures. Although such promises face a bumpy road, the mere fact that they are being discussed at the highest levels of American politics can increase public perception and acceptance of bitcoin.

Another aspect that supports bullish expectations is the growing institutional adoption. In recent years, companies such as MicroStrategy, Tesla and Square have invested large sums in bitcoin, seeing not only its potential as an investment but also as an asset that can diversify their portfolios in the face of inflation. This trend, if it continues, can boost the price of bitcoin further.

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