The price of the world’s leading cryptocurrency, bitcoin, plunged dramatically this month, dropping from a high above $101,000 to just around $94,000. The drop saw nearly $3 billion in margin trades liquidated.
Bitcoin is currently trading at a price slightly above $97,000 at the time of writing, according to CoinGecko . Despite bitcoin’s sharp price dive this week, crypto analysts believe that bitcoin still has a strong future.
For one, despite its volatility, the broader bitcoin market has grown more stable and large corporations and investment funds are increasingly eyeing the cryptocurrency. Michael Saylor’s MicroStrategy, for example, recently acquired $2.1 billion in bitcoin , signaling strong support for the world’s largest digital asset. Moreover, bitcoin exchange-traded funds (ETFs) have seen nearly $10 billion in inflows since the November election, and the upcoming Donald Trump presidency is likely to see continued gains for the popular investment vehicles.
"The spot bitcoin ETF has made bitcoin seem much more reliable," Arthur Azizov, CEO of B2BINPAY said. "Big companies getting involved in the ETF process and its approval have given bitcoin a lot more credibility."
"On top of that, Trump is appointing pro-crypto figures to important positions, like the new SEC Chairman, Paul Atkins, while removing officials who were holding back crypto growth," Azizov added. "Also, capital keeps pouring into bitcoin because many big corporations spread their investments over long periods – sometimes years — which helps support its long-term growth.”
Overall, bitcoin ETFs have continued to pull in record amounts of inflows recently, with Fidelity's bitcoin ETF logging $175 million in inflows alone this week. However, others have underperformed, with Bitwise seeing $39 million in outflows, and Cathie Wood's ARK recording $34 million.
Despite the success of bitcoin ETFs, the broader crypto market has experienced a nearly 5% dip, bringing the total global cryptocurrency market capitalization to $3.45 trillion, a 0.27% decrease in the past 24 hours, according to CoinMarketCap .
Altcoins including Ethereum (ETH), XRP, Solana (SOL), and Binance Coin (BNB) have also seen a precipitous drop in their value this week.