In the past 24 hours, Bitcoin has inched down 2.94% to $41,916.77, according to CoinMarketCap
In early December, world-famous investor Louis Navellier warned that the US central bank could start tapering crypto which could tank the market.
This comes after Bitcoin surged to a new all-time high of $68,789.63 on November 10.
That occurred after a Bitcoin futures exchange-traded fund made its highly anticipated debut.
That means instead of buying Bitcoin directly, you can invest in futures contracts.
However, bitcoin has plummeted 39.10% since its all-time high.
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However – the tides have now changed – and it’s back to volatility for Bitcoin and other major cryptocurrencies.
In September, Bitcoin and Ethereum tumbled on China’s ban on all cryptocurrency transactions.
But still, the euphoria in the cryptocurrency has outweighed the bearishness in the past 12 months overall.
In 2021, Bitcoin returned 60.1% to investors, according to UpMyInterest.
Although the returns have been favorable in the past year – a potential investment can turn out poorly if bought too high.
And the latest example has just happened recently, as explain above.
But then the billionaire caused a big sell-off on Bitcoin when he said Tesla would stop accepting payments of the cryptocurrency.
Although Mr Musk has said he thinks there’s a future with Bitcoin and Tesla, he has expressed environmental concerns over the cryptocurrency.
In July 2021, Bitcoin was seen trading as low as $29,360.96 because of the volatility.
Another risk to be aware of is the cryptocurrency sector comes with a lot of complexity, so you need to understand what you’re investing in.
And the same risk applies to even a well-known one like Bitcoin.
What is Bitcoin?
Aside from knowing Musk has quite a bit of influence on Bitcoin, know that it is the largest traded cryptocurrency, with a commanding market capitalization of more than $920billion.
Bitcoin was established in 2009 by an unknown computer expert using the alias Satoshi Nakamoto.
The cryptocurrency uses a mining procedure that involves a computer solving a difficult mathematical problem with a 64-digit solution.
For each problem solved, one block of Bitcoin is processed. In addition, the miner is rewarded with new Bitcoin.
But the reason why it gets criticism from environmentalists is that Bitcoin currently uses roughly 99.10 terawatt-hours annually, according to the Cambridge Center for Alternative Finance.
In comparison, an eco-friendlier cryptocurrency Cardano just uses six gigawatt-hours of energy per year.
Currently, are about 21million Bitcoin tokens in existence.
Can Bitcoin hit $70,000?
Some are wondering how high the price of Bitcoin can reach in 2022.
While Bitcoin came close to hitting $70,000 in November, there was a downward trend throughout most of December.
However, by the end of 2023, bitcoin is expected to hit $124,780.
A year from now, Wallet Investor sees the price of Bitcoin surpassing $81,000. In five years, the price is expected to skyrocket to $212,121.
But keep in mind, if bearish trends happen, that could impact these price predictions.
Plus, we recently explain 4 things you need to know about Dogecoin.