Yerevan (CoinChapter.com) — For Bitcoin and cryptocurrency investors, the long-awaited boom week has returned. That is the signal emerging from the performance across all the top-cap coins on Monday.
For instance, the BTC/USD exchange rate closed the day 1.04 percent higher after facing a last-minute sell-off following an incredible price rally. The pair apprehensively lost market share to its top rival Ethereum, the second-largest cryptocurrency by market cap, that rose by more than 16 percent on Monday.
Many analysts wondered whether Ethereum could hit $5,000 in the coming sessions. Speculations were very high about the blockchain project, especially amidst an ongoing boom in the decentralized finance and non-fungible sectors built atop its public ledger. Moreover, Ethereum’s upcoming network upgrades, which tend to make it faster and cheaper than its other smart contracts rivals, ensured investors’ long-term interest in its native token, ETH.
Bitcoin markets stood by the side as Ethereum rallied. Its dominance fell to almost a three-year low, proving that more and more traders migrated their capital into the altcoin market, reflecting their overvaluation fears about the benchmark digital asset.
Or, the migration reflected a more speculative nature of the cryptocurrency market. Traders tend to seek short-term opportunities in altcoins following Bitcoin’s price rallies. Even a sideways, neutral, and boringly consolidating move in the Bitcoin market create interim upside opportunities elsewhere. Therefore, the BTC/USD remains bullish despite its relative weakness against the so-called “altcoin season.”
Overall, Bitcoin remains unaffected by the Ethereum rally in the long-term. Warren Buffett is making sure of that.
The likelihood that the “Bitcoin bubble” would keep on ballooning has received more approvals from Berkshire Hathaway’s CEO, Warren Buffett. No, the legendary investor is not pulling an Elon Musk by investing in cryptocurrencies. Still, his comments on inflation last week showed the very fears that the investors cite before making their crypto purchase.
“We are seeing substantial inflation. We are raising prices. People are raising prices to us, and it’s being accepted,” said Mr. Buffett during Berkshire’s press conference last Saturday.
But the veteran investor and Berkshire’s vice chairman Charlie Munger clarified that they are in no mood to put their spare fortunes to use by investing in Bitcoin. On the other hand, Mr. Munger went a step ahead to blast the cryptocurrency off, reiterating his previous anti-crypto stance even in the face of a booming Wall Street adoption.
“Of course, I hate the bitcoin success, and I don’t welcome a currency that’s useful to kidnappers and extortionists, and so forth. Nor do I like just shuffling out of extra billions and billions and billions of dollars to somebody who just invented a new financial product out of thin air. So, I should say modestly that I think the whole damn development is disgusting and contrary to the interests of civilization. And I’ll leave the criticism to others.”
The comments expect to draw two polar opposite responses. First, other veteran investors could repeat Mr. Munger’s concerns about the Bitcoin market and decided to stick with traditional investments even as the Federal Reserve’s expansionary policy pushes the inflation rate above 2 percent. Meanwhile, the other response could see millennials ignoring an “old man’s rant” against a technology which they believe he does not understand (Buffett had warned against investing in Amazon and Google back in days, as well).
So far, history has shown that young investors do not care much about what the Berkshire duos think about Bitcoin. They continue to treat the flagship cryptocurrency as a hedge against inflation. And with technology entrepreneurs like Elon Musk and Michael Saylor backing Bitcoin’s store-of-value credentials, the odds favor the cryptocurrency this week and the next.
What’s Next This Week For Bitcoin
This week shows no major events that could influence the Bitcoin market prices, except the non-farm payroll report due this Friday. It expects to show that the US economy added 950,000 jobs in April while the unemployment claims narrowed from 6 percent in March to 5.7 percent in April.
Ideally, the data should serve as a signal to the Federal Open Market Committee to scale back its emergency asset purchasing program and push the US Treasury yields higher. In turn, it should prompt foreign investors to invest in US bonds and thus turn the dollar stronger and bitcoin weaker.
But the last week’s meeting shows that the Fed would like to continue buying $120 billion worth of government debts and mortgage-backed securities every month.
In short, the path of least resistance for Bitcoin remains to the upside.