Bitcoin volatility at 6-month high as price direction looks uncertain
Despite the unsteady price, miners are set to gross record revenues for the month of February.
- Bitcoin monthly mining revenue set to make a new record.
- Charlie Munger of Berkshire Hathaway says Bitcoin is too volatile.
- Bitcoin price remains uncertain after Musk’s “too high” tweet.
Bitcoin is trading for $48,318 at the time of writing, down 7.6% on the week, following volatile swings that brought it back down from a fresh all-time high of $58,640, recorded only four days ago.
It has now been over three months since the price of Bitcoin moved past its 2017 high of $20,000 and the maiden cryptocurrency has hardly been below $30,000 since January 2 of this year. Bitcoin’s 15% correction over recent days has been its largest correction since the bull run began back in September.
The 15% correction came soon after Tesla Inc’s CEO Elon Musk tweeted that both Bitcoin and Ethereum “seemed a little high”. However, markets have stemmed the losses and companies like Microstrategy are considering further debt offerings to raise cash for more Bitcoin purchases – despite announcing the purchase of another $1 billion worth only days ago.
Mining revenue on track to set a new monthly revenue record
The image below shows monthly cryptocurrency mining revenue which in the month of January 2021 raised the second-highest monthly mining revenue with the highest being in December of 2017.
As we can see, the month of February has become the second highest-grossing month in terms of Bitcoin mining revenue. Total mining revenue for the month of February is sitting at $1.17 billion only $700 million behind the December 2017 record of $1.25 billion.
With another three days left in the year’s shortest month, there will be cause for celebration among miners now experiencing the best and most consistent mining returns in the industry’s short history. Marathon patents group (NASDAQ: MARA) stock is up 630% over the last three months.
Despite the continued success of the cryptocurrency market over the last five months, negative sentiment continues to seam through the debate raging around whether Bitcoin and other cryptocurrencies are a viable store of value.
Charlie Munger, long time associate of Warren Buffet, yesterday said that Bitcoin is “too volatile” to be a reliable store of wealth. Echoing Ray Dalio’s remarks, Munger also mentioned that regulatory uncertainty also means that Bitcoin is unlikely to become a “medium of exchange for the world”.
Disclosure: The author owns a range of cryptocurrencies at the time of writing