Bitcoin price: Green covers
Bitcoin (BTC) - the world's largest cryptocurrency by market value increased by 2.71%, reaching 86,670.82 USD.
This new price contributes to bringing market capitalization to 1,729 billion USD, an increase of 57 billion USD. On the other hand, trading volume in 24 hours fell sharply by 26.98 billion USD, reaching 45.96 billion USD.
Assessment and forecast
Bitcoin prices have increased by 455% over the past three years as investors are increasingly optimistic about the world's largest cryptocurrency. This increase is partly due to the launch of Bitcoin ETFs for spot delivery last year, making it easier for investors to access Bitcoin than ever.
However, another driver for Bitcoin's value may come from investors' over-expectations - nurtured by the positive sentiment of spreading in a wider market thanks to artificial intelligence (AI). Currently, that mentality has changed, causing the prices of Bitcoin and many other currencies to fall sharply in recent times.
In the past few years, investors' demand for risky investments has increased sharply as new AI technologies have appeared, pushing the valuation of many technology stocks to very high levels and contributing to creating a popular mentality that risky investing is normal.
This may have supported the sharp increase in Bitcoin prices when the launch of the Bitcoin ETF, making it easier to own Bitcoin. However, some investors have now reduced their risk appetite or taken profits after a period of heating up, as Bitcoin has fallen about 20% in the past 3 months.
Bitcoin prices are always volatile, so there is no guarantee that it will continue to decrease or cannot rebound quickly. However, the recent adjustment of many AI stocks also shows that market sentiment is changing, and this could continue to reduce Bitcoin prices.
Many signals suggest that the US economy may be slowing, and if bad news continues to appear, Bitcoin could be under further downward pressure.
For example, recent employment data are worrying. A series of layoffs in October caused the labor market to record the heaviest job loss for this month in more than 20 years. Since the beginning of the year, businesses have announced cuts of 1.1 million jobs - the highest since 2020.
This does not mean that the US economy is about to decline, but it is clear that Bitcoin investors have begun to sell off just for a few bad signs. If more negative news appears next year or the unemployment rate increases, Bitcoin is likely to continue to plummet.
Another reason why Bitcoin investors are more optimistic is that the possibility of the US Federal Reserve (Fed) cutting interest rates is decreasing. Barron's magazine said in October that about 65% of investors expected the Fed to cut interest rates in December. This figure is currently only 46%.
When interest rates are low, investors often accept more risks, thanks to low borrowing costs and increased spending demand. The Fed could completely cut interest rates in December or next year, but if that does not happen, the fear of risks could keep cash flow away from the cryptocurrency market.
In Vietnam, the cryptocurrency asset market has been piloted since September 9, with a pilot implementation period of 5 years.
However, organizations and individuals participating in the cryptocurrency asset market must comply with relevant legal regulations on prevention and control of money laundering, terrorist financing, sponsorship of the dissemination of weapons of mass destruction, electronic transactions, network information security, network security, data protection to ensure security and safety in the cryptocurrency asset market and other relevant specialized laws.
