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- This latest fall comes as crypto-watchers digested a leaked blog from banking app Revolut.
- Bitcoin’s price has been “sensitive” in recent months as governments and regulators have focused on the sector.
- Experts say that the volatility of bitcoin prices is extreme and almost ten times higher than the volatility of major exchange rates.
After achieving two weeks of highs, bitcoin has once again fallen – this time as much as 2.5%. The popular cryptocurrency had climbed past its price average over the past 50 days. Trading has been volatile in recent weeks after the token moved past $64,000 in mid-April. It was trading at around $56,380 on Sunday morning.
This latest fall comes as crypto-watchers digested a leaked blog from banking app Revolut. It showed that it is preparing to allow some users of its premium products to transfer bitcoin holdings off the app.
However, analysts say this could challenge the status quo set by other platforms such as Robinhood and PayPal, which prevent bitcoin bought on their platforms from being moved elsewhere.
Bitcoin has been somewhat ‘sensitive‘
Bitcoin’s price has been “sensitive” in recent months as governments and regulators have focused on the sector. US President Joe Biden has proposed almost doubling the capital gains tax for the wealthy.
And this pushed bitcoin down as much as 3.6% to about $49,760 And sent it below $51,707 in late April. Matt Maley, the chief market strategist for Miller Tabak Co., said things with the biggest gains would be most susceptible to selling. He explained that some people who have huge money in this, therefore a big jump in the capital gains tax, they’ll be leaving a lot of money on the table.
US investors in the digital asset already face a capital gains tax if they sell the cryptocurrency after holding it for more than a year. According to Fortune, anyone who bought bitcoin a year ago is sitting on a 575% gain. And for investors who bought it in April 2019, the gain equals roughly 800%.
Volatility of Bitcoin
Experts say that the volatility of bitcoin prices is extreme and almost ten times higher than the volatility of major exchange rates. The excess volatility adversely affects its potential role in portfolios.
Some experts think that bitcoin cannot function as a medium of exchange and has only limited use as a risk-diversifier. Thus, one of the reasons bitcoin is classified as an investment.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
