Community Trust ScoreVerified
- BTC price is determined by the market it trades in
- BTC trading in a range bound manner
- Russia Bans Cryptocurrencies
- Investors pessimistic about Riskier Assets
Global factors are contributing to overall decline in the global market. This has also influenced the bitcoin DIP. The price of the BTC is determined by the market it trades. The market sets the price of the Bitcoin at the low – roll your sleeves and get ready to buy.
Currently, Bitcoin is expected to stay range-bound between “$44,000 and potentially $38,000 before an eventual breakout.”
At the time of writing BTC price has been trending around 38,394. This decline is happening following Russia proposing complete ban of cryptocurrencies. Russia has taken this decision because they feel they are sensing threats to financial stability and that it is their monetary policy sovereignty.
Russia’s decision is significant because the cryptocurrency trading volume in the past year was $5 billion. The ban reportedly is expected to affect the trading volume.
Practically, it is going to be very difficult ban cryptocurrencies, several other countries have been proposing similar threats.
This just looks like investors are pessimistic about riskier assets. There has been a global stock market sell off and this has also in turn weighed heavily on crypto prices.
The US Federal Reserve has also stated that it will tighten its monetary policy at a quicker pace to deal with the persistently high inflation.
Pessimism of every kind is continuing to grow among investors and traders when it comes to riskier assets it will likely influencing the price of equities and bitcoin.
“Risk on” assets come with significant price volatility. BTC is not the first of its kind “risk on” asset. There have been many such in the traditional markets like Equities, Commodities, high-yield bond, real estate, and currencies.
Equity ownership of assets come with debts and liabilities. The net worth is derived after subtracting the liabilities. Equity is a very important concept for investors. It is used to determine whether a particular purchase price is expensive. Nobody wants to pay more than the valuation. People prefer to buy assets, the value of which is sufficiently low when compared to its equity. The cost we pay for ownership of an asset after the debts are paid off is equity.
With the coming of decentralized blockchain systems “tokenization of equity” is becoming popular. This has made affordable creation, issuance, and transfer of digital tokens possible. Trading Bitcoin and other kinds of cryptocurrency is very complex. Assessing the equity factor for BTC is difficult. It adds to a great level of complexity due to regulatory interference, thefts, hacking,
Therefore, it is not a game for everyone. Those who cross the understanding that BTC is about risks, know that there is reward for risk. Thus, those who are looking for 100% guarantee might never be convinced about BTC.
