Bitcoin fired on Thursday as its price came within striking distance of its highest level ever.
The price of bitcoin was trading at $ 17,185, down $ 794, or 4.42%, at 7:15 am ET. The cryptocurrency hit a minimum overnight of $ 16,581.20.
Thursday’s sale comes after the cryptocurrency during the previous session touched a peak of nearly $ 19,391, just 0.54% below its all-time closing peak of 19,497.
“Volatility is baking the cake in terms of bitcoin,” said Mati Greenspan, founder of Quantum Economics, a Tel Aviv-based project to help people understand financial markets. “This kind of significant corrections has happened quite frequently in all his big bull runs. This is the markets way of shaking traders with weak hands and / or excessive leverage. ”
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Bitcoin, the largest cryptocurrency by market capitalization at more than $ 321 billion, had a strong 2020, gaining 160% through Wednesday.
The price of the cryptocurrency has benefited, along with other risk assets, from a financial and fiscal stimulus that has been used worldwide to combat the economic damage caused by lock-in with the goal of slowing the spread of COVID-19.
“We remain bullish as ever and still feel that fresh high is always possible before Christmas,” said Greenspan.
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The bitcoin price surge has caught the attention of Hollywood stars and previously skeptical Wall Street investors.
Billionaire investor Stanley Druckenmiller earlier this month told CNBC that he bought bitcoin because of its potential as a “store of value.”
Also taking part in the bitcoin frenzy was “Game of Thrones” star Maisie Williams, who took to Twitter for her investment advice. She bought the cryptocurrency despite being told by more poll respondents not to.
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While bitcoin seems to be gaining popularity with the masses, there are still plenty of skeptics, including Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund with $ 98.9 billion in assets.
He recently argued that cryptocurrency volatility means it is not a store of value and has little correlation with commodity prices, meaning that owning it “does not protect” purchasing power, among other things.