Bitcoin investors remain optimistic despite recent correction

Bitcoin advocates are doubling their optimism and expecting new record highs for the world's largest cryptocurrency. After a drop of up to 20% between Sunday and Monday, the Bitcoin price has recovered by about $6,000, which corresponds to a 14% decline over the past seven days. Following a drastic plunge below $50,000 over the weekend, a level last reached in February, expectations for a renewed rally are high. Despite the worst week since the collapse of the FTX exchange in 2022, Bitcoin bulls are optimistic that the price could exceed $100,000 by the end of 2024. As recently as March, Bitcoin hit an all-time high of $74,000. Martin Leinweber, Director of Digital Asset Research at MarketVector, told Yahoo Finance that it is still realistic to reach new highs in 2024. "If we can reclaim the old highs around $72,000, I don't think it's unrealistic to see Bitcoin between $80,000 and $100,000." Onramp Bitcoin strategist Mark Connors also reaffirmed on Tuesday that his forecast of $110,000 for 2024 remains valid. The CIO of Bitwise Asset Management, Matt Hougan, also expects new highs later this year despite the recent downturn. "Bitcoin investors think long-term," said Hougan to Yahoo Finance on Monday. "They are not paper hands that quickly capitulate." Despite these positive outlooks, there are renewed questions about the actual safety and non-correlation of Bitcoin, led by skeptics and even BlackRock CEO Larry Fink. Such a correction, which occurred in exaggerated lockstep with technology stocks, could prove the opposite. According to Leinweber, Bitcoin remains a high-risk asset and cannot be compared to gold as a store of value due to a lack of trust and institutional involvement. Additionally, since Bitcoin is traded around the clock, it is often the first asset sold during market-specific downturns. The recent declines in Bitcoin prices appear to be linked to the weakening of trades related to the US dollar and the Japanese yen. With the decline in leveraged bets, multiple firms are paying closer attention to the inflows and outflows of new Bitcoin ETFs managed by major Wall Street asset managers. On Monday, US Bitcoin ETFs recorded net outflows of $168 million, while the trading volume doubled to over $5.2 billion according to JPMorgan estimates. "Traders will be more cautious after getting burned, so it will increasingly become a market for investors," said Leinweber from MarketVector. The digital asset group at Fundstrat Global Advisors maintains their forecast that Bitcoin will reach $126,000 in 2024 and does not view the recent decline as the "market top" for the cryptocurrency. The recent drop in Bitcoin over the past days is "really just a drop in the bucket," according to Mark Newton of Fundstrat Global Advisors.