The Bitcoin craze is getting worse towards the turn of this year. How can? Bitcoin just posted an all-time high after perching above $ 20,000 / BTC.
This price broke the previous Bitcoin record in 2017. Not only sparkling as it approaches the turn of the year. Rather, this is also good news for Bitcoin investors from all walks of life who have been waiting for this rare moment to happen.
Just imagine, in just one night BTC investors made a profit of up to $ 2,827. Of course this is considered unreasonable to many people out there. Because, Bitcoin is the only investment instrument that can do this.
Even so, there are also investors who have lost hundreds of millions because of Bitcoin. However, this is what is called investment. Where, no one in this world can predict price movements 100% with accuracy even though it has been assisted by even sophisticated equipment. As investors, we must be smart to see opportunities in an investment instrument. One of them is Bitcoin which has provided millions of funds to thousands of investors from various parts of the world.
Some of the reasons Bitcoin is experiencing such strong moves seem to be based on FOMO.
At the moment most of the sentiment towards Bitcoin seems to be filled with a lot of FOMO caused by the Fed. After discussions from the FOMC (The Foreign Open Market Committee) and Jerome Powell's official statement, the crypto market seems to be in a constant state of pressure.
The first coin to taste it was Bitcoin which is the leader of the crypto market to date. This is because the Central Bank of America is making the overall statement that they will continue to be dovish
The dovish point is that they will continue to have an expansionary outlook on their monetary policy for the next few years. As a result, many feel that the value of the US Dollar will continue to erode.
This was caused by an expansionary monetary policy which was not implemented through reference interest rates but through open market operations. To do this, the Fed's policy of buying debt securities with a benchmark interest rate approaching 0%.
As a result, the yield on US debt securities fell along with the increase in the money supply. So that the value of the US Dollar itself continues to decline which results in the liquidation of large reserves based on the US Dollar.
Given that many institutions and companies have reserves in US Dollars, this is not good news. So, it seems that many other alternatives are looking to secure wealth.
At the same time, Bitcoin trading volume is seen increasing before the price crosses $ 20,000. This increase in volume stems from sales volume hitting an all-time high which, according to CryptoQuant, is the result of whale selling to institutions.
However, CryptoQuant data also shows that purchasing data still beat sales data even though it has reached ATH. So there's a good chance that the Bitcoin cash flow actually comes from institutional investors.
Due to the combination of a dwindling supply, and institutions buying large quantities, the Bitcoin price has increased significantly. Most likely, as a result of that, a lot of FOMO or fear will be left behind by retail investors who worry about falling behind in profits.
Thus, the possibility that the price will continue to rise is the impact of a purchasing institution that is being followed by retail investors. As a result, this appreciation carries quite a high risk given the possibility of encouragement from retail investors or whales who have the opportunity to pump and dump.
This fear of being left behind or FOMO can turn out to be bad because there is one party or big player who can take advantage of the price. So it does not rule out some parties who experience losses due to high entry prices.
At the moment the price is trying to keep going up past $ 23,000 which, despite this success, is still consolidating and possibly going down. Therefore, retail investors are expected to be careful even though there is a lot of news from institutions such as Micro Strategy and Gray-scale that can continue to drive price increases.
But the good news to consider is that the Bitcoin options market is still signaling a positive move for the spot market. In addition, the Top Cap Model prediction still shows the possibility of appreciation of up to $ 54,000 along with the Bitcoin heat map which shows the buying movement is still strong.
Even though it has broken its record high, BTC is predicted to shoot again to the next level of $ 30,000. This prediction is certainly not impossible, if we quote from JPMorgan's publication some time ago. Where, JPMorgan analysts predict that more institutional investors will shift their assets to Bitcoin in the near future.
Unmitigated, $ 600 billion of fresh funds are predicted to enter Bitcoin through insurance companies and pension funds spread across various countries such as Japan, the United States, and Europe. The amount of funds refers to 1% of this company's asset portfolio that is transferred to Bitcoin. As has been done by Massmutual by buying $ 100 million in Bitcoin for investment needs of its customers.
Choosing Bitcoin at this time is the right step for investors to get a fast harvest rather than just depositing their money in other investment instruments that have lower returns than Bitcoin. By investing in BTC, at least the investor has made big strides to make money that is beneficial to him and not the other way around.
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