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Bitcoin, which updated its all-time high by approaching $ 58,000 on February 22, then fell rapidly and continued its downward movement yesterday and today. In fact, Tesla and SpaceX CEO Elon Musk lost more than $ 15 billion due to the sharp drop in Tesla shares in the US, and lost the richest title in the world to Jeff Bezos, the CEO of Amazon. In fact, many times in the history of Bitcoin we have witnessed sharp ups and downs. The first question that comes to mind on this topic is what is the reason for these strong fluctuations …
Hürriyet.com.trAccording to İsmail Hakkı Polat, professor in the Department of New Media at Kadir Has University, the fluctuations are due to the fact that Bitcoin is an open market and is available for speculation. Polat says this is in the nature of Bitcoin.
“Bitcoin has lost too much more than 90 percent in value. Then he got up from where he fell and continued on his way. This area is not a regulated market like Borsa Istanbul or Wall Street. Since it is not a market subject to state laws with regulations, the basic rules of your own business logic apply here.
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There is also the nature of speculating in a market that is not guaranteed. It is necessary to know this nature, analyze and invest accordingly. The current stochastic process based on the purchase contract for the price fluctuates will be performed in Turkey. I’m really amazed at how people who don’t have financial and digital knowledge, don’t even know what Bitcoin is, do these kinds of transactions. “
Polat, who said that when we look at the history of Bitcoin, the supply increases by half every four years and the demand increases and the price increases, “There are very high volatilities in the uptrend of the price. Because from the time it rose above its record high just four years ago, Bitcoin’s price has experienced / continues to experience daily weekly accelerations, fluctuating roughly 20-25 percent plus and minus. For this reason, those who concentrate on daily work for hours often panic or amuse themselves when they see high drops on the screen. However, in the general history, the largest annual paintings must be evaluated ”.
‘Whoever sells their cars and gets into this business loses 90 percent’
Polat underlining that he does not recommend short-term buy-sell transactions to investors with little digital and financial literacy for Bitcoin, said: “In the long term, a bit more like gold, it should spread over a few years. But I advise them to invest in smaller, forgettable amounts instead of selling the house on the market they don’t know about, “he says.
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Okay, now what? Will the decline in Bitcoin continue?
Regional General Manager of Huobi Global, one of the largest cryptocurrency exchanges in the world Alphan gogus Hürriyet.com.trhe said…
Is one of the reasons for this sharp decline “correction movement”? Do you expect the decline to continue in the future?
Our experience shows that the decline that started on February 22 is a corrective move. We see it as it dropped from $ 58,000 to $ 48,000 at a time, but in evaluating the situation, we must not forget how quickly it got here. In October 2020, Bitcoin was worth $ 12,000. As the interest of institutional actors increased with the effect of the current economic environment, it increased by more than 200 percent in a short period of three months to 40 thousand dollars. In early February, Elon Musk’s Twitter posts and back-to-back investment news from corporate players surged from $ 46,000 to $ 58,000 in two weeks. Today, it has actually returned to its value on February 8, when Tesla announced that it would buy $ 1.5 billion worth of Bitcoin.
What is the most important factor that will affect the short-term state of Bitcoin?
It is the reaction of the institutional actors to these strong fluctuations. In an environment where regulators also make cautionary statements about cryptocurrencies, the risk appetite of institutional investors will be decisive. If their interest continues, Bitcoin will be positively affected by this. However, even if the price drop continues in the next few days, Bitcoin will rise again in the long term due to limited supply.
During bull seasons, do many new investors rush to the BTC markets? What warning would you like to give these investors?
In fact, a significant number of new investors have joined the crypto market in recent months. We can see this with the rapid increase in the number of users and people from all walks of life suddenly talking about Bitcoin. The most important point I want to underline here is We must not forget that Bitcoin is a very high risk investment tool. Don’t forget that it took two years for it to return to its previous level after the sharp decline in 2018. I recommend new investors to invest according to their own risk appetite, without fear of missing an opportunity.
Investors also prefer altcoins. What are the risk assessments here?
The word Altcoin is short for “alternative to Bitcoin” and describes all cryptocurrencies except Bitcoin. There are hundreds of altcoins on the market, but most of them are not stable and cannot survive for long.. The most important issue to consider in altcoins is the intrinsic value of the project behind it. If the project is successful, the chances of the altcoin gaining value also increase. Therefore, I highly recommend that you research the project thoroughly before investing in altcoins. There is no point in investing in projects that have no intrinsic value.
What direction is expected in the currency markets in the medium and long term?
Over time, the coins that have no value will be eliminated and the coins that really make sense will continue their life; I think the most important transformation will be the role of blockchain technology and cryptocurrencies in the financial world. They will allow new investment products to enter our lives. With the establishment of regulations, the projects with active value behind them will offer opportunities as tokenized. The entry of existing capital market products into the crypto money market can also create opportunities, such as attracting investors from different countries by listing on global markets.
