Bitcoin prices had been under pressure ever since the ETF approval had arrived. But just recently the prices of the OG-crypto currency have inched up to its $47,000 mark, sparking a positive sentiment among investors. However, Bloomberg in a report says that the Bitcoin price surge might not be enough for crypto markets to sustain.

FTX fall and altcoin pump-and-dump reflect unstable crypto market

According to Bloomberg, cryptocurrency investors currently believe that digital currencies are returning. After some prodding from the courts, the US Securities and Exchange Commission has finally approved Bitcoin exchange-traded funds. Rekindled investor interest in high-risk assets, including technology stocks, appears to have spilled over into tokens as well.

However, the experiences of cryptocurrency traders are not fully reflected in the pricing of a select few major coins, like Bitcoin and Ether. The crypto market is still dented with a couple of issues.  If an investor had entered the cryptocurrency space in 2021, Sam Bankman-Fried’s FTX exchange could have seemed like a sensible place for investments. In addition, aside from Bitcoin, there were 12,000 other smaller “altcoins” to experiment with. Many of these altcoins either get extinct or are highly unstable, warning that a widespread pump-and-dump trading phenomenon inflates token values.

Investors hold investments from other tokens

Unlike in traditional financial markets, where investors view volatility unfavorably, in the crypto market, excessive volatility is seen as a chance to generate bigger gains. According to a research paper published in Science Direct, it has been shown that cryptocurrency investors follow behavioral trading patterns that emphasize transient trends. They also use hourly and daily frequencies in high-volume, high-sentiment trades. These findings support the notion that there is noisy trading in the cryptocurrency market. The concept of lottery-like demand drives investors to look for cryptocurrencies. The demand is driven by large payouts, distancing themselves from stock market crash risk. This research indicates that cryptocurrency investors are motivated by risk-taking.

With Bitcoin, the price surge usually offers better returns. However, with more volatile and less valued altcoins, the returns usually take time. These altcoins are also highly unlikely to pay as well. This usually forces investors to hold back from investing in secondary tokens.

Bitcoin price today and outlook

Bitcoin prices have rebounded to surpass the $49,000 mark, after previously falling to $43,000. At the time of writing, the OG-crypto currency was trading at $49,741.70, being up nearly 3.2% in the last 24 hours. As compared to the same time last day, the market cap for BTC has soared 3.17% to $75.7 billion.

The outlook for many cryptocurrencies, especially that of Bitcoin is anticipated to be positive this year. Various institutions have been placing bets that prices for the OG-crypto will see an upscale in the future. This includes Bitwise’s forecast that in 2024, the price of Bitcoin will surpass $80,000. For the first half of 2024, at least, institutional investment in Bitcoin will continue to be the main focus, according to Coinbase.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.