What a week for Bitcoin (CCC:BTC). After rallying to a new all-time high above $58,000, the leading cryptocurrency took a serious plunge. Today though, one piece of news suggests that a floor is here. With this in mind, what are the latest Bitcoin price predictions?
Investors should start with a quick recap of the facts. In recent weeks, all catalysts have been supporting a historic rally in Bitcoin and other cryptocurrencies. We saw the launch of the first Bitcoin exchange-traded fund in North America, and a handful of major financial institutions announce crypto integrations. Celebrities continued to pound the table for BTC and all sorts of altcoins. Then, things took a quick turn for the worse. Elon Musk said Bitcoin and Ethereum (CCC:ETH) were overvalued, and experts started calling for a pullback. That pullback came.
Today though, we may have found a floor. After touching a 24-hour low below $45,000, Bitcoin has started to turn around. Right now, it is trading for just over $47,000. That is still well off its high, but it suggests a rebound may be quickly in store.
So what could be behind this turnaround?
One theory is that in the next few days, a new settlement out of New York will restore the crypto bull run. Essentially, New York Attorney General Letitia James announced a settlement in an ongoing case with Bitfinex and Tether (CCC:USDT). For those unfamiliar, Bitfinex is a crypto exchange. Tether is a now controversial cryptocurrency that mirrors the U.S. dollar. Back in April 2019, New York accused Bitfinex of using Tethers’s funds to cover up $850 million in losses.
Bitcoin Price Predictions: The Bitfinex and Tether Boost?
How is this good news? And how does it support bullish Bitcoin price predictions? Bitfinex and Tether have agreed to stop doing business with New Yorkers, and now must pay $18.5 million in fines. Plus, the settlement agreement says Bitfinex may not be able to recover lost funds.
Well, Bitfinex and Tether walked away without admitting any wrongdoing. Plus, although mainstream support is growing for cryptocurrencies, many still consider it a risky asset. Given the wide use of Tether as a stablecoin, a different settlement outcome could have seriously hurt. As Omkar Godbole wrote for CoinDesk, at stake was a huge loss of confidence. It looks like the chance of that situation is now in the rear-view mirror.
Add in talk of a $1.9 trillion stimulus package, and support by the Federal Reserve for such relief funding, and the case for cryptos should be clear. Keep the Bitfinex and Tether story in mind, and keep an eye on Bitcoin price predictions. Things could start looking up again soon.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.