Will Bitcoin price still drop?
According to Bitwise Asset Management Chief Investment Officer Matthew Hougan, there are 3 factors that are driving the current Bitcoin price drop.
However, Hougan clarified to Yahoo Finance that the current correction is only temporary and that the leading cryptocurrency is preparing the ground for a rally in the second half of 2022.
First, Bitcoin is currently being impacted by the broad shift to a risk-off market, according to Hougan. He pointed out that Bitcoin and the rest of the cryptocurrency market are adjusting to the new environment due to the fact that it involves a variety of asset classes. The market risks have been exacerbated by geopolitical tensions between Ukraine and Russia.
Second, he mentioned that U.S. President Joe Biden’s upcoming cryptocurrency executive order could have an impact on the market.
The executive order has reportedly been postponed due to a lack of agreement between the White House and US Secretary of Finance Janet Yellen on certain elements.
Ultimately, Hougan also speculated that the correction could be the result of tax-related selling. Cryptocurrency owners, in particular, maybe selling their assets to pay tax obligations.
“I think once we get past that, it will be a relief,” he added, “There are short term hurdles in front of us, but as I look at the underlying trends, I’m extraordinarily bullish about where we will end up by the end of this year.”
If the network experiences positive developments, Hougan predicts that Bitcoin will surpass its previous all-time high later this year.
The approval of a Bitcoin spot ETF is at the top of his list, along with what he calls “reasonable regulatory outcomes.” Simultaneously, he predicted that increased institutional adoption of Bitcoin would propel BTC to the new ATH.
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