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Bitcoin reclaims $51,000 as risk appetite improves

CryptocurrencyDec 07, 2021 12:55
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By Samuel Indyk – The price of Bitcoin was above $51,000 on Tuesday as risk appetite improved amid positive early signs that the Omicron COVID variant may be less severe than previous variants.

Over the weekend, US pandemic adviser Dr Anthony Fauci said that although it is too early to make any definitive statements on Omicron, it does not look like there’s a “great degree of severity” to the variant.

The comments, alongside early data from South Africa and other regions, helped propel stocks and other risky assets higher yesterday and they have continued in the same vain on Tuesday.

Further supporting the risk tone was results from a pre-clinical study of GlaxoSmithKline's (LON:GSK) monoclonal antibody treatment sotrovimab, which retained its in vitro activity against the full known Omicron spike protein.

Bitcoin Price

After touching a low around $42,500 on Saturday, Bitcoin has risen over 20% to trade at its current price near $51,500.

The increase in Bitcoin today is due to the current risk tone in the market, according to Swissquote Senior Analyst Ipek Ozkardeskaya.

“With the improved risk sentiment, we see the price of Bitcoin advance past the $51,000 mark,” Ozkardeskaya said in an emailed note. “Bitcoin is a high-risk asset, however, there is clear evidence that Bitcoin is paving its way to the traditional finance, and that institutional investors are increasingly on board.”

Volatility here to stay?

Some analysts have argued that as Bitcoin matures as a financial market asset that price volatility will lessen going forward.

However, crypto trading firm QCP Capital thinks that the macro situation could lead to further volatility in the coming year.

“We expect a tricky macro environment going forward,” QCP said on their Telegram channel on 6th December. “This increases the potential for extreme and violent moves like the one we just saw.”

Meanwhile, Hargreaves Lansdown Senior Investment and Markets Analyst Susannah Streeter has issued a word of caution for those keen to invest in cryptocurrencies. 

"Crypto coins and tokens have been propelled higher in this era of ultra cheap money and as speculation swirls about just when central banks will start further tightening mass bond buying programmes and start raising interest rates, they are likely to continue to be highly volatile" Streeter said in an emailed note on Monday. "The president of El Salvador may have proudly stated his country was buying on the dip, but the perturbations at work in the crypto stratosphere, means investing in Bitcoin is not for the faint hearted or for those with no money to lose.’’

Bitcoin reclaims $51,000 as risk appetite improves

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