Bitcoin has experienced significant fluctuations recently, bringing the world’s largest cryptocurrency back into the spotlight. At 17:45 Tashkent time on December 19, its value surpassed $103,000 on the UzNex exchange. Just a few days earlier, on December 17, Bitcoin reached an all-time high of over $108,000. What led to this growth? What is the current situation with Bitcoin? And what can we expect for the future? Kursiv Uzbekistan spoke with experts to gain insights on these questions.
Reasons for Bitcoin’s fluctuation
The largest cryptocurrency experienced a decline following remarks made by Fed Chair Jerome Powell during a press conference about the main interest rate. Powell stated that the Federal Reserve has no authority to own Bitcoin and has no plans to change this rule. His comments came in response to a journalist’s inquiry regarding the potential value or benefit of the U.S. government creating a strategic reserve of bitcoins.
Optimism surrounding this cryptocurrency has persisted since Donald Trump‘s victory in the U.S. presidential election. Denis Shipilov, director of Lockton Finance, noted, “The U.S. is the world’s largest economy, and President-elect Donald Trump ran with a positive agenda towards crypto-assets.”
Crypto enthusiast Ulugbek Muslimov added that Trump and his nominees for various positions generally support crypto-assets more. Many advocate for adopting the crypto industry, contributing to overall market sentiment.
However, the expert cautioned that the market’s current growth is driven more by speculative optimism than by fundamental changes.
“Retail investors should always remember that crypto-assets are highly volatile and subject to significant fluctuations. After a sharp increase, a corresponding decline is also likely. Large institutional investors typically hold a minimal portion of crypto-assets in a diversified portfolio, usually no more than 1-2%,” Muslimov explained.
What is happening now
Arthur Hayes, the former head of the BitMEX exchange, predicts a significant sell-off of crypto assets in the days before Trump’s inauguration. He believes crypto investors may become disillusioned with the president’s promises and begin actively selling their assets.
According to Hayes, there is a considerable gap between crypto investors’ high expectations and the reality that Trump lacks politically viable solutions for immediate change.
“There are no immediate solutions, no matter what Elon Musk tells you,” he argues.
Despite his concerns about the short-term outlook, Hayes remains optimistic about cryptocurrencies’ long-term potential. He plans to buy Bitcoin during downturns, anticipating an upcoming phase of growth and a resurgence in the cryptocurrency bull market.
Predictions for the future
Experts agree that Bitcoin’s long-term outlook remains positive. Ulugbek Muslimov believes that Bitcoin will continue to attract investment as an alternative to gold, particularly as the ecosystem evolves and the variety of products expands. “The inflow will increase over the long term,” he notes.
Shipilov emphasizes that the successful adoption of crypto assets in Uzbekistan will require an increase in the population’s financial literacy.
“Service providers will need to create educational programs, which will positively impact the industry,” he states.
“We observe a shift in businesses’ attitudes towards cryptoassets, moving from caution to interest, as blockchain technology allows for the development of unique, convenient and functional tools. However, it is crucial to understand that as the use of cryptoassets grows, the public must also become more knowledgeable to avoid falling victim to fraudsters, understand legal requirements and ensure compliance,” Shipilov stresses.
How to buy crypto assets legally in Uzbekistan
In Uzbekistan, Bitcoin and other crypto-assets can be purchased through licensed platforms, such as the UzNex exchange. Kursiv Uzbekistan previously discussed the ways to legally buy cryptocurrency in a special article titled “How to Buy Cryptocurrency in Uzbekistan for Different Amounts Legally.” As of December 19, 2024, 15 different coins are available for purchase on the UzNex exchange.
According to Shipilov, the investment module on the Lockton Finance platform also allows legal investment in Bitcoin and other popular crypto-assets.
The website of the National Agency for Perspective Projects, which serves as the market regulator, has published a complete list of companies officially authorized to buy and sell crypto-assets in Uzbekistan.
Purchasing coins through licensed platforms helps minimize risks and ensures compliance with the law. Buying or selling assets on unlicensed third-party platforms can lead to fines or jail time.
