Steven Ehrlich, head of research at Forbes Crypto, has spoken to Jill Malandrino on the Nasdaq Trade Talks show about the current Bitcoin correction, explaining what has been pushing the flagship crypto to the South and why he believes in good prospects of Ethereum.
Reasons of “Bitcoin exhaustion” from Forbes
Steven Ehrlich mentioned several reasons for the current Bitcoin plunge. BTC has been up about 83 percent so far this year, he stated and plunged 3 percent over the past month, seven percent on the week.
The reasons come from different directions. The first is that some institutional investors who have bought in recently are selling BTC to fix their profits. However, the bigger concern is central bank rising interest rates. Due to that, Bitcoin is trading now more as a risky asset, rather than a hedge or a store of value.
Ehrlich remains bullish on Bitcoin medium to long term, however, in the short term he expects Bitcoin to show periods of sideways trading or even of a small correction.
Ethereum keeps outperforming Bitcoin
As for the second biggest cryptocurrency by market cap, Ethereum outperformed BTC last year and is doing so in 2021 as well.
So far, it has been up 132 percent, as per Ehrlich. However, ETH is now following a similar bearish pattern as BTC, it has been declining since the recently hit all-time high of $2,000.
However, Ethereum is still doing well, the Forbes head of research stated. The two reasons for that is that institutions continue to show interest towards this asset and the second is that ETH is the platform which produces various DeFi platforms and now also non-fungible tokens (NFTs), which have turned into a craze recently.
As reported by U.Today, on March 7, it became known that a big Chinese tech publicly traded company Meitu allocated $40 million to buy Ethereum and Bitcoin and put them on its balance sheet – $22.1 million worth of Bitcoin and $17.9 worth of Ether.