- Bitcoin’s success in the last year could be the reason for an increased regulatory activity
- Before Bitcoin becomes a store of value, it needs to overcome its volatility problems
- The bulls are back in control, as Bitcoin shoots above $37,000
Bitcoin opened 2021 in a phenomenal fashion, trumping it’s all-time high six times before finally peaking at $41,941. As a result, Bitcoin has received even more attention from investors, Wall Street firms, and of course, regulators.
The recent dramatic drop of Bitcoin which saw the number one digital asset trade under $30,000 has rekindled the fear of an imminent price crash. Amid the fear, former Goldman Sachs’ chief executive, Lloyd Blankfein has warned that regulators could move against Bitcoin if it continues to grow.
Is the Growth of Bitcoin a Concern?
By many rankings, Bitcoin closed 2020 as the best performing asset. Bitcoin started the year trading at around $7,000 and closed at $29,000. Not all assets enjoy such immense growth in a year, and according to Blankfein, this growth could be a reason why.
As Bitcoin and the extended crypto market gains mainstream acceptance and use cases, it has become pertinent for countries to structure policies to regulate their use. This became even more evident as Bitcoin through every roadblock to its current ATH.
In speaking with CNBC, Blankfein warned that regulators should be concerned about the success Bitcoin has enjoyed. And they could possibly be arming themselves to deal with it. He points to Bitcoin’s semi-anonymous nature and its wild price swings as the reasons why the asset needs to be appropriately regulated.
Bitcoin As a Store of Value
Many have considered Bitcoin to be the digital gold, implying that it could take over the precious metal as the next major store of value. In Lloyd Blankfein’s opinion, achieving that feat could be quite tough.
Pointing to the high volatility of the digital asset, Blankfein explains that Bitcoin would need to overcome its “regular 10% daily moves” before it can be regarded as a store of value.
In the last 30 days, we have seen Bitcoin rise from $29,000 to trade above $41,900 only to fall back under $30,000.
On the Flipside
- Bitcoin has been tipped by the Bank of Singapore as an asset that has the potential of replacing gold as a store of value
- To get to that point, cryptos must first rival local currencies, by becoming less volatile
Bitcoin Bounces Back
After a protracted pull-back that lasted over two weeks, it looks like the bulls are back in control of the market. As of the time of this writing, Bitcoin has risen by over 17 percent in the last 24 hours. Bitcoin which traded as low as $30,023 on January 28, now exchanges hands at $37,400 per coin.
Many other leading altcoins are currently in the green, however, Dogecoin’s rise is perhaps the most notable. Over the last 24 hours, the price of DOGE has spiked by over 340 percent and over 550 percent in the last 7 days. Dogecoin now trades at $0.055 per coin.