Bitcoin (BTC-USD) lost as much as 9% in the last week. This takes only a small fraction away from the cryptocurrency’s over 80% year-to-date gain. BTC holders should look at the 9% drop as noise and volatility to ignore.
It is still useful to uncover why Bitcoin fell, in case selling momentum increases.
Last week, the U.S. CPI triggered a rally in Bitcoin. The market treats BTC as a hedge against inflation. The reason for the loss of the post-CPI inspired gain is unknown. Stock markets continue to weaken as the regional bank stocks fall. Logically, weak banks should increase purchases of Bitcoin. Deposits on platforms would increase.
Liquidity for Bitcoin and other cryptocurrencies like Ethereum (ETH), XRP, Cardano, and Binance (BNB) coins should increase. Despite high-profile platforms declaring bankruptcy last year including FTX, investors want diversification. They may buy a small position in crypto. The money would leave banks and into crypto as a result.
Bitcoin’s rebound back to nearly $30,000 signals the market is not fearful of more crypto scams. Digital currency plays a small but meaningful role in the economic and financial system. It will not enjoy the size that big banks and credit card companies command. Still, it will grow.
This increases the attractiveness of crypto, led by Bitcoin.
