The Bitcoin price has gone from USD 38,500 to USD 42,500 and then back to USD 38,500, but not all investors feel discouraged. Long-term holders have not moved 61.72% of their holdings for more than one year, as they strongly believe in the appreciation of BTC.
The recent geopolitical issues between Russia and Ukraine have affected the cryptocurrency market. However, institutional investors continue to show that they are still confident in the advantages offered by cryptocurrencies.
Clear settlements have led to a drop in the value of crypto assets. Bitcoin has recently gone through high volatility, going from USD 38,500 to USD 42,500 and then to USD 38,500 again. However, the current situation does not discourage all investors, as inflow volumes indicate that many still trust the market.
Cryptocurrency funds recorded USD 127 million in cumulative inflows during the first week of March. That was the highest weekly figure since December, rising significantly higher than the USD 36 million of the previous seven days.
That indicates that investors continue to believe in Bitcoin despite the crash occurring in early December. They have proven on numerous occasions they still put their money in Bitcoin.
How Government News Affects the Price of Bitcoin
The Bitcoin value rebounded as crypto investors seemed to accept the US executive actions. Joe Biden, the US president, recently signed an executive order to assess the risks and benefits of creating a digital dollar.
The government executive order is much less intrusive than the market feared. They primarily address it to federal agencies and other crucial agencies to assess the relevance of cryptocurrencies in the economy.
The legal text requests the Department of Commerce to research how cryptocurrencies could contribute to the economic competitiveness of the United States worldwide. In general, the US government seems to be adopting an approach to adopt cryptocurrencies, not eliminate them.
What Could Happen to Bitcoin
Bitcoin is the crypto asset that has always had the highest weekly inflow. The pioneering cryptocurrency remains ahead of other investments in the market. In that way, it has proven to be one of the most profitable digital asset investments in the last few years.
Long-term Bitcoin holders remain firm and do not sell their coins. The BTC supply percentage chart shows that they have not moved 61.72% of their holdings for over one year. That has been increasing since early 2022 and has accelerated during the war between Russia and Ukraine. That proves that hodlers firmly believe in the appreciation of BTC in the long run.
Ways to Profit from the Volatility of Bitcoin
Regardless of the excellent prospects, the Bitcoin market will remain volatile for some time. A correct investment method could make volatility help traders make profits.
The trading of BTC futures allows traders to go long or short on the cryptocurrency. They can make money from those derivatives as long as their predictions are correct. Meanwhile, spot traders only make profits when the price of Bitcoin rises.
Exchanges could lend traders leverage to help them increase their purchasing power with profits. For example, a trader opens a long position of 100 BTC at USD 38,000 with 100x leverage. If the price rises to USD 42,000, he will earn between USD 42,000 and USD 38,000.
By Alexander Salazar
