Hundreds of billions of dollars have evaporated from the cryptocurrency market

Bitcoin no longer functions as a kind of “digital gold”. After the intensive sell-off of the past few days, more than 100 billion dollars evaporated from the cryptocurrency market.

According to CNBC approx 130 billion dollars evaporated from the crypto market in just 24 hours.

The reason for this is that the leading cryptocurrencies have been continuously selling out for many days.

According to data from CoinMarketCap on Jan. 24 (Vietnam time), the price of Bitcoin fell at a certain point $33,184/dong then recovered slightly 33,937 U.S. dollar/dong, down 3.92% compared to the previous 24 hours. The coin’s market cap shrank 642 billion dollars.

So compared to the record 68,789 U.S. dollar/dong was founded on 11/10/2021, bitcoin price fell by 51.29%. This is also Bitcoin’s lowest level since July of last year.

Bitcoin price has fluctuated wildly over the past year. Compared to the record set more than two months ago, bitcoin price is down 51.29%. Photo: CoinMarketCap.

Hundreds billion dollars “evaporate”

The price of Ether – the second largest cryptocurrency in the world – has also fallen sharply in recent days. At 10:30 p.m. on Jan. 24, Ether is down more than 8% compared to the previous 24 hours 2,239 U.S. dollar/Copper. Since the peak 4.89$1/Co-set on 11/16/2021, Ether price is down more than 55%.

Cryptocurrencies are moving in the same direction as stocks. Investors sold off risky assets like cryptocurrencies and tech stocks amid concerns about tight monetary policy from US officials.

“In the immediate future, our biggest concern is how stock markets will react to this week’s Federal Reserve meeting,” said Leah Wald, chief executive officer of Valkyrie Funds Digital Asset Investment – commented.

“A correction in traditional investment vehicles could be the catalyst for a recovery in Bitcoin, Ether and other cryptocurrency prices. In reality, however, crypto traders tend to be more risk-averse than investors in other markets. Hence.” “We assume that there will be fluctuations in the next few days and weeks,” said the meteorology expert.

According to Mr. Vijay Ayyar, Vice President of Luno, the bitcoin price could fall to the 30,000 region given the current sentiment.32,000 won U.S. dollar/dong within a week. “The bottom is likely to form at one of the above thresholds before the market recovers,” predicts the expert.

Some experts believe that the threshold 30,000 won U.S. dollar/coin will be the next big milestone for cryptocurrencies. Bitcoin price can return to recovery momentum if it does not break below this level.

However, according to 22V Research analyst John Roque, the price of bitcoin could fall further. The expert emphasized that the price of this cryptocurrency has fallen sharply from the peak set last year.

No more “digital gold”.

Investors are also reeling from rising inflation. Bitcoin proponents have argued that Bitcoin is a form of “digital gold”. But that view has fallen out of favor with newer investors.

According to CNBC, more short-term investors are investing in this asset class as institutional investors pay attention to cryptocurrencies. As a result, Bitcoin is viewed as a risky asset and is moving in the same direction as tech stocks.

As the Fed and central banks around the world rolled out a raft of measures to stimulate the economy, stock and crypto markets have benefited. But the Fed’s tightening of monetary and fiscal policies could severely curb Bitcoin’s bullish momentum.

“The price of bitcoin has yet to gain momentum, although some proponents refer to bitcoin as ‘digital gold.’ Cryptocurrency still seems like a risky asset,” financial expert Craig Erlam (based in London) told us.

Bitcoin has ceased to function as a form of digital gold. Photo: Reuters.

With this, investors are also assessing the impact of new regulations on the crypto world. Recently, the Central Bank of Russia proposed to ban the use and mining of cryptocurrencies in Russia. The reason given is that this currency threatens the financial stability, the well-being of the people and the monetary sovereignty of the country.

Russian authorities have repeatedly argued about banning cryptocurrencies. Some officials criticized that Bitcoin could be used to launder money or finance terrorism.

In a report published Jan. 20, the Central Bank of Russia said that speculative demand has fueled the rapid growth of cryptocurrencies, bringing out the characteristics of a financial pyramid. The agency warned that the cryptocurrency bubble will threaten financial stability and investors.

In April, bitcoin price also fell from its peak after Chinese authorities tightened controls on bitcoin mining and trading.

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