Bitcoin retreats as $50K comes back into focus

imageCryptocurrency News9 hours ago (Mar 25, 2021 13:55)

© Reuters.

By Samuel Indyk – Bitcoin has fallen back towards $50,000 amid a broad-based decline in cryptocurrencies.

There has been nothing overly specific behind the retreat today or late yesterday, after prices were initially buoyed by news that Elon Musk’s Tesla had started accepting Bitcoin as payment for its vehicles. The announcement confirmed the car company’s plans from earlier this year when they said they expected to start accepting Bitcoin when they said they had also bought $1.5bln worth of the cryptocurrency to diversify their reserves.

Deutsche Bank (DE:DBKGn) survey

A recent survey from Deutsche Bank interviewed 520 market professionals and 52% of the respondents see the price of Bitcoin below $60,000 in 12 months time. Bitcoin had broken above that level for the first time on March 13th.

The most common predicted range over the next three months was between $60,000-$80,000, expected by 36% of the survey’s respondents.

Bank of America (NYSE:BAC) on Bitcoin

A recent research note from Bank of America on Bitcoin has also continued to garner attention, particularly after the Tesla news. The research note, titled Bitcoin’s Dirty Little Secrets, highlights some of the environmental concerns surrounding the cryptocurrency.

The note alleges that the Bitcoin network emits about 60mln tons of carbon dioxide, about the same amount as Greece, and they have worked out that a $1bln flow into Bitcoin may cause carbon dioxide to rise by the equivalent of 1.2mln internal combustion engine cars. Not ideal for Tesla’s mission of accelerating “the world’s transition to sustainable energy”.

Nevertheless, the institutional demand from corporations such as Tesla and PayPal has clearly become more active and supportive of Bitcoin, particularly compared to the bull run in 2017-18 which was mainly driven by retail.

Bitcoin is now around $10,000 lower than its all-time high set earlier this month, however, the world’s largest cryptocurrency remains 700% higher than 12 months ago. Whether this correction will continue to manifest itself into a full bear market remains to be seen.

Bitcoin retreats as $50K comes back into focus

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