By now it’s lunch time again, so time for our Bitcoin lunch. We look, of course, at the live Bitcoin price and the prices of the top 25 crypto. Then we look at an upcoming soft fork, why the market is waiting and a billion loss for MicroStrategy.
We begin, of course, with the live Bitcoin price and the prices of the top 25 crypto currencies.
Live Bitcoin price rises, prices top 25 crypto flat
At the time of writing, the live Bitcoin price is quoting EUR 36,911.06 ($38,934.80). This is 1.32% higher than during our Bitcoin lunch yesterday.
The market for the other crypto from the top 25 is mostly positive. Except for the stable coins, we see only green numbers. The biggest gain of the day so far is for Tron (TRX) with +10,56%. This is a major exception in an otherwise fairly flat market. On the site of Tradeincrypto.com you can analyze all live crypto prices 24 hours a day.
Bitcoin and crypto in anticipation of the Fed
So we see a positively-minded, but wait-and-see market and that has everything to do with the interest rate decision and explanation of the phasing out of the support program for the U.S. economy, on which the FED will shed its light later today (from 8 p.m. Dutch time). An increase in interest rates by 50 percentage points is expected and appears to have been priced in. This would explain why the BTC price has not (yet) started a bull rally, despite the bullish technical signals.
Expectation and correlation determine BTC price
Thus, if the Fed makes an interest rate decision in line with expectations, this will not be a reason for drastic price change. This obviously becomes different if the increase is limited (bullish) or if the intervention becomes more drastic (bearish).
In addition, it is especially important how aggressive the Fed is when it speaks out about the future. A number of interventions are expected this year. The more aggressively these are put down, the more bearish expectation the market will price in.
In addition, we see how Bitcoin is highly correlated with the (tech) stock market by institutional investors. So how those prices react in response to the Fed announcements will ok play a role in the reaction of crypto and especially Bitcoin investors. With that, we can leave the technical analyses and theoretical expectations for what they are, because until the FED has made its announcements and answered the press questions we are trading in an uncertain market. So we have to take into account both a quick price drop and a quick price rise for Bitcoin. With a trading bot you can anticipate both scenarios.
MicroStrategy leads billion loss on Bitcoin
That the correlation between Bitcoin and stock prices is becoming stronger by institutional investors can be seen in the quarterly results of pioneer MicroStrategy. Although the average purchase price of Bitcoin ($30,700) held by them is well below its market value and below this year’s low of $33,000, they recorded a loss of $1 billion on BTC in the first quarter due to the price declines.
So with this we can see the impact in good and bad investment times on BTC balance sheets of institutional investors. This is important because this development is new in BTC history. By the way, the same figures show that MicroSrategy has not sold any BTC yet, which should give confidence.
With the quarterly figures obviously not yet accounting for the larger losses in April, it will be interesting to see how the boardroom and shareholders of this investor will deal with a loss situation.
Technical BTC blockchain update imminent? Proposal for soft fork
One of the criticisms of Bitcoin is that there is now a growing number of crypto offering user-cases where BTC is not (yet) strong. With developments like Taproot and Lightning, people are trying to work on this. One of the important developments where BTC still plays a lesser role is the use of smart contracts.
The Bitcoin BIP-119 soft fork proposal aims to introduce an application for smart contracts. This seems like a good development, yet there is controversy. For example, key Bitcoin experts feel that they want to move too quickly to the testing phase of the custom code which means that the security audit is not complete. They also foresee other negative impacts on the Bitcoin code, the impact of which cannot be estimated. You can read the technical explanation of the Bitcoin BIP-119 and potential dangers here. Of course, discussion in the short term leads to uncertainty, but it is good to see that thoughtful work is being done to expand Bitcoin user cases in the longer term. We will of course continue to follow the developments. Will you?
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You can always follow the developments yourself with our WANT crypto analyses or the background articles and previews on the crypto market and Bitcoin. Of course, you can also follow the live quotes 24 hours a day if you want to stay informed in real time. Are you interested in other investments besides crypto? Then our weekly Monday morning price forecast might be a reading tip. “Please note: We never give financial advice, so our contributions can’t be interpreted that way either. Always do your own research and decide on rational grounds if, when, what and how much you want to invest in.”