Wednesday, Aug 10, 2022

Bitcoin Plunges Below $18,000 First Time After 2020, Ethereum Less Than $1,000

The crypto market has crashed, with Bitcoin losing around 70 per cent of its value since November 2021

Source: Shutterstock
Source: Shutterstock

The price of Bitcoin (BTC) plunged below $18,000 for the first time since late 2020, giving a further indication that the cryptocurrency selloff is intensifying. On Saturday, the cost of the most widely used cryptocurrency dropped by over 13 per cent, reaching a low of $17,593, according to Coindesk, a crypto news platform. 

Since December 2020, this figure has been the lowest for Bitcoin before rising to $18,556, still down 9.22 per cent. Since reaching its high, Bitcoin has now lost more than 70 per cent of its value. Bitcoin reached a high of more than $68,000 in 2021.

The price of Ethereum has dropped to 50 per cent from where it was a month ago, breaking below the $1,000 price level for the first time since January 2021. Since reaching an all-time high in November 2021, it has decreased by about 80 per cent.

Why is Crypto Market Crashing? 

Recently, there has been a lot of negative news about cryptos. For instance, global crypto exchange Coinbase laid off 18 per cent of its workers, and its CEO and co-founder Brian Armstrong partially blamed the impending "crypto winter".

“I think the entire crypto market was due for clean-up and course correction. Once they are cleaned BTC may gain its value in the long run and come out from this phase. But not in next six to 12 months. Bad projects need to be relooked at and treated accordingly,” says Jayjit Biswas, a Web 3.0 and blockchain enthusiast.

Additionally, businesses including Global Inc., Gemini, and BlockFi announced they will let go of thousands of workers as investors turn away from riskier assets. Crypto experts told Outlook Money that a bitcoin hedge fund had encountered difficulties.

“Fed rate hike and growing inflation scared people who want to withdraw money and hoard it for bond investment and to meet personal expenditure. Covid and the Russia-Ukraine war put enormous inflationary pressure on the common people. First, they need to feed themselves and only then can they spare some money for speculative areas like cryptos,” added Biswas. 

At the time of writing, the global crypto market cap was $809 billion, down 8.6 percent over the last day, according to data on CoinMarketCap at 12 am. However, the worldwide crypto market volume was $76 billion, up 55 per cent over the previous day, signaling a significant sell-off of crypto assets by traders.

This market behavior applies to any sort of investment for its own set of influential factors. "Investors must understand that the market will present itself in different ways, sometimes it is bullish while at some point it can be bearish too. This can be seen as an opportunity by those who were waiting for the right time to invest in their projects of interest. They must study the projects and invest accordingly in the ones where they see potential. Additionally, keeping a futuristic approach is a must," says Kumar Gaurav, founder, and CEO of Cashaa, a crypto platform.