The cryptocurrency had jumped above the $38,000 level last week after Tesla chief executive officer Elon Musk had come out in support of the digital asset. However, prices later slipped below the $33,000 level over the weekend
Bitcoin prices reclaimed the $36,000 level on Wednesday after trading as the world’s biggest and the oldest cryptocurrency continued to recover from recent losses on the back of institutional demand. The virtual currency traded in a wide range of $34,002.30 and $36,762.39 over the past 24 hours.
According to blockchain data and intelligence provider Glassnode, US-based Grayscale Holdings has been acquiring bitcoins faster than it is being mined. “In 2021 so far, around 26,000 BTC (bitcoins) have been mined. Meanwhile, digital asset investment fund Grayscale Holdings has acquired over 40,000 BTC in the same period," Glassnode said in a note.
The cryptocurrency had jumped above the $38,000 level last week after Tesla chief executive officer Elon Musk had come out in support of the digital asset. However, prices later slipped below the $33,000 level over the weekend.
According to experts, bitcoin has been losing its dominance in terms of market share. “Bitcoin has lost about 10% in dominance since peaking to 73%. Both ripple and DOGE (Dogecoin) saw high upward price action over the weekend," said Ashish Singhal, chief executive officer and co-founder, CoinSwitch Kuber, cryptocurrency investment platform.
Meanwhile, the world’s second-biggest cryptocurrency, ether, hit a fresh all-time high of $1,563.90. The crypto asset was trading at $1,520 at around 2.30 pm on Wednesday, as per data available with crypto exchange WazirX.
Other cryptocurrencies were also in the green with tether and ripple trading up to 4.5% higher.
Back home, there have been concerns that the impending ban on private cryptocurrencies in India will hit the industry. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, expected to be passed in Parliament’s ongoing budget session, comes after the Supreme Court last year quashed an RBI ban on crypto-related payments.
The bill has spooked investors with bitcoin prices in India slipping into a discount of up to 20% against the global markets.
“We are watching the news and making sure we are prepared for any scenario. The recent bitcoin prices dip looks dramatic, but the panic is not the only explanation or even the most likely one. Indian exchanges are small compared with the global market, so price swings tend to be bigger," said Vikram Rangala, chief marketing officer, ZebPay.
Industry experts are also hoping that the government will consider the opinion of all stakeholders before making the decision.
“The bill shows that the government is willing to take some concrete step towards cryptocurrencies. Certain parts of the bill, for example, banning private cryptocurrencies is worrisome, but we are yet to find out what they mean by private cryptocurrencies. The silver lining is that the government is considering exceptions to certain cryptocurrencies to promote their underlying technology," said Singhal.
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