Bitcoin's Surge Stalls Amidst Market Volatility and Anticipation

Bitcoin's record-breaking surge came to a halt on Sunday, with its price plummeting over 6% to $56,306. Following a week of gains and several unsuccessful attempts to surpass its previous high, Bitcoin's volatility is expected to increase amid the recent economic stimulus package and mainstream adoption by companies like Tesla and Mastercard.

Bitcoin's Surge Halts Amid Volatility and Market Anticipation

Bitcoin (BTC-USD), the preeminent cryptocurrency, experienced a setback on Sunday as its price plummeted by over 6%, reaching $56,306 (£40,596). This downturn follows several unsuccessful attempts to surpass its record high, which had culminated in a peak of $59,400 on Saturday.

The recent decline marks a departure from Bitcoin's remarkable performance last week, during which it surged by more than 5% to reach a high of $60,322.60, according to Coindesk. This surge continued the cryptocurrency's stellar rally throughout the year, surpassing the previous all-time record set at around $58,330 on February 21st.

Bitcoin's meteoric rise has been nothing short of impressive, with a surge of over 65% in the past month alone and a remarkable 100% increase year-to-date. However, the cryptocurrency experienced a brief retreat in late February, dropping as low as $43,000 amid uncertainties in traditional markets regarding stimulus expectations and their impact on US bond yields.

Analysts predict increased volatility in the stock market in the coming weeks following the signing of a long-awaited $1.9 trillion COVID relief package by US President Joe Biden, which provides individuals with a third stimulus check of $1,400. This is widely expected to boost optimism in financial markets.

In a significant milestone, the market value of all Bitcoin in circulation surpassed $1 trillion for the first time last month, as revealed by data website CoinMarketCap.

The cryptocurrency's recent growth has been fueled by growing acceptance among mainstream investors and corporations, including Tesla (TSLA) and Mastercard (MA). Tesla's $1.5 billion investment in Bitcoin in February sparked speculation that it may start accepting the cryptocurrency as payment for its products. In December, Bitcoin's market capitalization surged past Visa (V), making it the world's largest financial service.

Despite its impressive rally, Bitcoin's volatility remains a major concern, and experts continue to caution against using it as an investment. Industry data indicates that approximately 13% of the world's Bitcoin, valued at around $80 billion out of a total of $600 billion, is held by just over 100 individual accounts. Furthermore, the top 40% of all Bitcoin, representing approximately $240 billion, is concentrated in roughly 2,500 known accounts out of an estimated 100 million overall.

Despite Bitcoin's volatility, a survey released last month revealed that nearly two-thirds of investors in the United Kingdom intend to purchase the cryptocurrency in 2021. Additionally, according to a Trading Platforms report, the number of Bitcoin ATMs worldwide has increased by 70% in the past six months, reaching 16,500 in March. These ATMs allow individuals to purchase Bitcoin using cash or debit cards, and some offer both buying and selling options.