After Bitcoin peaked recently at $65,000, bulls found support at around $50,000. That ended last week when the Nasdaq fell by around 2%-3% in two days. When Bitcoin and cryptocurrencies moved alongside the markets, it broke investor confidence that the former is a hedge.
Fundamentally, China’s crackdown on cryptocurrency mining last month is a defining near-term event. This caused a blip in prices that proves short-lived. Bitcoin adjusted its hash rate, which is a measure of the network's computing power on mining and processing transactions.
As a self-healing network, China cannot have an impact on the price of Bitcoin. The demand for Bitcoin will decide the currency’s price. At record hash rate levels, Bitcoin will benefit from strong demand. In the longer term, Bitcoin prices could approach $65,000 levels sooner than speculators think.
Invest in Miners
Investors who are afraid of setting up a cryptocurrency account on Coinbase (COIN) or Voyager Digital (VYGVF) may consider mining stocks instead. This includes Marathon Digital (MARA) and Hut 8 Mining (HUT). Microstrategy (MSTR) has a sizable holding in Bitcoin. Yet the software company’s underlying business does not make money. Investors could buy Bitcoin instead of holding MSTR stock.
Coinbase and Voyager are platform stocks that fluctuate with the price of Bitcoin.
