The bitcoin rate has renewed its historical maximum, exceeding the $ 60 thousand mark. Many analysts attribute this to the fact that US citizens have already started receiving checks for $ 1,400 as part of a new $ 1.9 trillion stimulus package. There is a strong belief that people buy cryptocurrencies because of the extremely low rates, which have reduced the attractiveness of bonds and other assets. In addition, many people get bored at home during a pandemic, and buying bitcoin seems like a certain entertainment to them.
Will the sharp rise in bitcoin turn into the same sharp fall, or has the cryptocurrency formed a stable upward trend, and $ 100 thousand for bitcoin no longer seems fantastic? Leonid Delitsyn, an analyst at FINAM Group, answered the question of Fortrader magazine.
– Bitcoin is no exception to the range of high-risk assets that are now readily bought. These are the shares of well-known companies such as Tesla and Zoom, and the shares of companies that were just listed on the stock exchange during the IPO. These are shares of companies in the medical and pharmaceutical sector, which become public joint stock companies without even having any proceeds. And even “blank companies” (SPAC), which do not have not only revenue, but also a business plan, but only founders known to the business community.
The fall, in general, does not have to be sharp, although it does happen. But even for a company like electric truck maker Nikola (NKLA), which promised a miracle battery that actually didn’t exist, it took half a year for its stock to drop back to baseline (before SPAC merged with the truck manufacturer). This means that investors who hoped for a miracle may refuse to believe for a long time that a miracle will not happen.
However, if panic begins and it is contagious, then a collapse occurs, and it is certainly possible. Probably, one should think: can it happen that a stable upward trend will form in all assets: both in the “stars” of the stock market and in the IPO market, including “blank checks”? And even Nikola shares will start to be snapped up again! What is needed to make such a fantasy come true? It is only necessary that there is hope that more money will be added to the economy, some of which will come to the stock market and become the basis of this growth.
Now they are waiting for the arrival of about $ 200 billion – the share of the “stimulus” that will be on the market. For global growth to continue, waiting for the next injection of happiness is needed – albeit probably already for a large amount. If you can’t believe everything in growth at all, then you need to understand which assets are more likely to resist and why. Will investors refuse to participate in an IPO for bitcoin or sell bitcoins to buy “blank checks”? History shows that the boom in the IPO market could be followed by a sharp chill, as after the 2000 dot-com collapse. In the history of Bitcoin, sharp drops are also not uncommon. So, if investors decide that these ideas have already worked out and it is time to shift to oil and retail, then the collapse will be general.