The mood has continued to remain grim in the global cryptocurrency market, with the biggest crypto token Bitcoin declining by almost 7.7% to a three-week low at the close of the previous week, and the global crypto market cap plunging by almost 6%. In early trade on August 22, the total crypto market volume stood at $58.78 billion—a 28.83% fall over 24 hours. While Bitcoin held fort at the $21,000 mark, Ethereum
struggled to advance. What, exactly, is causing the sustained crypto rout? Is the more pain in store for the investors?
“Bitcoin has seen a dramatic 70% drop from the 69,000-level to the 21,000-level. But interestingly, the token stands at almost exactly half of its price one year ago and almost exactly double its price two years ago. While the downslide in Bitcoin has been disappointing, it has been very highly correlated with all other macroeconomic factors such as liquidity in the market. At the same time, it is also in the inherent nature of this beast to be very volatile,” observes Ajeet Khurana
, Bitcoin expert and Founder at Genezis Network
during a panel discussion on ET NOW.
By and large, investors are continuing to stay away from riskier assets with continued fears of inflation, higher interest rates, etc. Are we looking at subdued crypto trade like that between early 2018 and mid-2020? Is this, as some experts suggest, the onset of a big crypto crash? “One thing I am confident about is that the worst might just be over. All bull and bear cycles eventually see a consolidation. There has been a selloff in the last few days, but investors should look at the recent trends as an opportunity,” advises Prashant Kumar
, Founder at weTrade.
“The crypto prices are higher than those of a month ago and of two years ago. In fact, the recent performance of the Nasdaq-listed tech stocks indicates that crypto is becoming a larger part of the technology ecosystem and following similar patterns. Bitcoin is not just an asset but also the technology which will power the future. Once the bull market comes, cryptos should also see proportionate progress,” Kumar concludes.