The recent fall in Bitcoin prices has again given a platform for sceptics to doubt the long-term viability of the cryptocurrency. No doubt, asking about the long-term sustainability of Bitcoin in the wake of constant up and down is a legitimate question as continuous turbulence and tumultuous price characteristic of Bitcoin (and to some extent, other cryptocurrencies too) is again on display. According to the latest figures, Bitcoin is at around $43k, an almost 30% drop in its price from its all-time high value of $60k as recorded in February and April this year. This is a serious drop and large enough to give fodder to doubters.
It is essential to understand the reasons behind the fall in the valuation of Bitcoin. The prices of Bitcoin surged on the back of the hope that Bitcoin adoption is going mainstream. Especially after the announcements made by Tesla, Microsoft, and AT&T, the cryptocurrency got a very enthusiastic response from investors. However, the recent news in which the owner of Tesla, Elon Musk, tweeted that the company is no longer accepting Bitcoin as a payment method had adversely impacted the fortunes of Bitcoin. Besides Tesla’s withdrawal announcement, the inquiry constituted against Binance in the US is also causing panic among the investors.
In the short run, it might be difficult for Bitcoin to regain its heft and go beyond the $55k level, although most of the cryptocurrency experts and specialists agree that in the long term, the coin is poised to attain its mojo back. The ongoing covid-19 pandemic and economic uncertainty in the market are likely to help Bitcoin regain its valuation and, in the process, will help investors to again cheer for the cryptocurrency market.