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Bitcoin is down more than $10,000 from the the record high it reached earlier this month, and continues to slide steadily in price from its peak above $68,000
There does not appear to be any single cause for the price drop, with analysts citing several reasons for the slump.
One of the simplest explanations is that long-term investors are taking profits from their holdings, which typically happens after bitcoin hits an all-time high.
There is also investor uncertainty surrounding the US infrastructure bill, which could see companies subjected to stricter rules surrounding the holding of cryptocurrencies.
Another thread of doubt for investors has been from fears that creditors of the Mt Gox exchange could finally liquidate their payments – seven years after the cryptocurrency exchange collapsed.
It has been confirmed last week that 141,000 BTC ($8 billion) under custody would soon be distributed among those impacted by the Mt Gox Hack.
Those more bullish about bitcoin’s direction, believe the continued spread of adoption that has pushed cryptocurrency into mainstream in 2021 will prevent such corrections in the market.
Major companies like Tesla and MicroStrategy continue to increase their position into bitcoin, while several countries look set to join El Salvador by introducing bitcoin as legal tender. Some believe the bull run is far from over and stick by their prediction for a new all-time high to be reached either before the end of 2021 or in early 2022.
This weekend, El Salvador President Nayib Bukele announced plans for the world’s first “Bitcoin City.” The municipality will be set up like a tax haven for wealthy crypto investors. No income, property, capital gains or payroll taxes, only a 10% value-added tax (VAT) and pay for its keep partially by net-zero, volcano-powered bitcoin mining. Construction will be financed primarily by a $1 billion bitcoin bond issued on Blockstream’s Liquid network, a Bitcoin sidechain.
Residential areas, shopping centers, restaurants, “everything built around bitcoin,” we live with what the market provides. Some things are prioritized. Housing is either high-end or tiny, stacked hexagonal pods. There’s a McCafe on every block. It’s probably easier to buy a second passport than groceries. When the digital economy is paramount, and the population mostly globe-trotters.
BITCOIN CREATOR SATOSHI NAKAMOTO NOW 15TH RICHEST PERSON IN THE WORLD
Satoshi Nakamoto, the pseudonymous creator of bitcoin, is now the 15th wealthiest person in the world after the cryptocurrency’s recent price rally.
Nakamoto’s net worth is estimated to be up to $73 billion, with crypto holdings in the region of 750,000 to 1.1 million BTC. This ranks them above Walmart heirs Jim and Rob Walton, as well as Mexican entrepreneur Carlos Slim.
The price of bitcoin hit a new all-time high earlier this month above $68,000 following an increase of more than 300 per cent over the last year. One prominent prediction model has forecast it could rise above $100,000 before the end of the year, which would see Nakamoto ascend to the top 10 of the world’s wealthiest, with a net worth on a par with investor Warren Buffett.
Australian superannuation fund Rest Super is set to become the first retirement fund in the country to invest in cryptocurrencies.
The fund has more than $46.8 billion worth of assets under management and around 1.8 million members. Superannuation is the equivalent of a 401k or Individual Retirement Account in the United States and is compulsory for all employees. Until now, the $2.4-trillion sector has been extremely cautious about cryptocurrency.
During Rest Super’s annual general meeting on Tuesday, the firm’s chief investment officer, Andrew Lill, told members that the company sees digital assets as an “important part” of its portfolio moving forward but will proceed “carefully and cautiously,” noting that:
“It’s still a very volatile investment, so any allocation exposure we make to cryptocurrencies is likely to be part of our diversified portfolio as initially a fairly small allocation that may, over time, build.”
Lill went on to add his view that offering members exposure to crypto and blockchain tech could provide a “stable source of value” amid a time in which investors are flocking to crypto as a hedge against fiat-based inflation.
“I do think that, in an era of inflation, it could be a potentially good place to invest,” he said.