Anil Singhvi decodes Bitcoin status as just one tweet by Elon Musk breaks cryptocurrency by a massive $8000

February 24, 2021 John Bitcoin 0

Zee Business Managing Editor Anil Singhvi today said that stability in Bitcoin prices will increase its long term acceptance. However, there is much volatility in it still as is evident from the fact that an Elon Musk tweet caused Bitcoin price to break by as much as $8000. Bitcoin is now trading below $50000. Elon Musk is no longer the world’s richest man, but he and Amazon’s Jeff Bezos are still tussling over this description.  

Significantly, the Market Guru said that Bitcoin doesn’t enjoy the trust and confidence of participants, traders or investors when compared to other asset classes and this hurts the cryptocurrency.

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Singhvi highlighted that any asset class, to be acceptable to the global audience, should not outperform or underperform in a significant manner. Singhvi said that Bitcoin has a strong fan following, but things happen that make it volatile. The best asset class is one which doesn’t move up or down significantly.

Bitcoin motto seems to be, “Love me or hate me, you just can’t ignore me.” Participants, who are in favour of Bitcoin don’t like to hear anything against it. Some participants believe Bitcoin is heavily speculated and should be avoided by both traders and investors.

Singhvi said Fundamentals should help participants to value the asset class easily. Asset class should not move on the basis of supply, whether it is more or less. Singhvi said mismatch in demand and supply is not an issue, but only the supply side issue is a matter of concern. There should be a proper proportion of Demand and Supply.

Elon Musk himself has said that the speed at which Bitcoin prices are moving up is not good, said Singhvi. Musk is a good friend of Donald Trump and his tweets have similar impact on markets too. Singhvi said Trump never thought before shooting off a tweet, whether it will be profitable or not. Elon Musk understands that after he bought into Bitcoin, price surged sharply. 

Singhvi said that it is to be appreciated that Musk calmed everyone’s nerves by saying that the moves by Bitcoin are not normal after it shot up to historic highs.

Singhvi said if the speed of the upmove or down move in Bitcoin is sensible, slow and steady, there would be more acceptability for it in the long term. Other countries and their Governments will accept Bitcoin as an asset class if the movements in it are more reasonable, slow and steady. Short term, sharp and fast moves will certainly benefit. 

However, long term acceptability will come with stability which is extremely important to understand, highlights Singhvi.