For a while, it looked like Bitcoin was going through the roof with President Biden’s ruling on a digital dollar. But that effect has already been negated.
Bitcoin moves on supply and demand and not on news speculation. Of course, the latter helps to make the price move up or down. But good news for the world of cryptocurrency does not automatically mean that the price also rises.
When it leaked that the US government is going to investigate a digital dollar, the price of Bitcoin rose by more than 8 percent. The price went from around $38,500 to a high of $42,540 on Coindesk† President Biden’s actual statements followed later, but Bitcoin failed to hold. Despite the positive noises, the price went down like a roller coaster.
The drop happened last night while you were undoubtedly sleeping well. Despite the good news from Biden, Bitcoin plunged more than five percent. The currency is now close to pre-good news levels. So almost back to square one. In short, cool developments do not have the desired effect that investors sometimes hope for. It remains a game of supply and demand. And for some time now, there seems to be more supply than demand in Bitcoin.
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