Steven Ehrlich, head of research at Forbes Crypto, has spoken to Jill Malandrino on the Nasdaq Trade Talks show about the current Bitcoin correction, explaining what has been pushing the flagship crypto to the south and why he believes in Ethereum (ETH)'s prospects.
Reasons for "Bitcoin exhaustion" from Forbes
Steven Ehrlich mentioned several reasons for the current Bitcoin plunge. BTC has been up about 83 percent so far this year, he stated, and plunged three percent over the past month, and seven percent on the week.
The reasons are varied. The first is that some institutional investors who have bought in recently are selling BTC to fix their profits. However, the bigger concern is the central bank raising interest rates. Due to that, Bitcoin is trading now more as a risky asset, rather than a hedge or a store of value.
Ehrlich remains bullish on Bitcoin in the mid to long term; however, in the short term, he expects Bitcoin to show periods of sideways trading or even a small correction.
Ethereum keeps outperforming Bitcoin
As for the second-biggest cryptocurrency by market cap, Ethereum outperformed BTC last year and is doing so in 2021 as well.
So far, it is up 132 percent, as per Ehrlich. However, ETH is now following a similar bearish pattern as BTC, declining since its recent all-time high of $2,000.
However, Ethereum is still doing well, the Forbes head of research stated. The two reasons are that institutions continue to show interest in this asset and ETH is the platform that produces various DeFi platforms and, now, also non-fungible tokens (NFTs). NFTs have been all the rage lately.
As reported by U.Today, on March 7, it became known that a big Chinese publicly traded tech company, Meitu, allocated $40 million to buy Ethereum and Bitcoin and put them on its balance sheet. That is $22.1 million worth of Bitcoin and $17.9 million worth of Ether.