Another Bitcoin Bloodbath, Will Crypto Gamblers Recover?

Another Bitcoin Bloodbath, Will Crypto Gamblers Recover?

Another Bitcoin Bloodbath, Will Crypto Gamblers Recover?

Last week, we saw another proof of just how volatile the crypto market can be. During the last seven days, Bitcoin dipped to the lowest level in the last six months, continuing the bitcoin bloodbath or downward trend that started in November. Other major cryptocurrencies also experienced a significant loss of value. The stock market didn’t perform much better either, with NASDAQ, Dow, and S&P500 all sliding down.

Bitcoin Bloodbath On Friday Plus Meltdown Across the Markets

Friday was a particularly bad day for all crypto investors and gamblers, as well as the broader market. The crypto space was heavily influenced by the overall market sentiment towards FED fiscal policy and the continued sell-off of tech assets. The Bitcoin itself plummeted 10.4% in just a day, ending the Friday trading at only $36,000 level. The results could be even worse, as the closing value came after recovery from dipping down all the way to the neighborhood of $35,000. The last time value of Bitcoin stood at $35,000 was about half a year ago, in July 2021.

The rest of the notable cryptocurrencies had a bearish day on Friday, too. Ethereum entered a slump, ending the day down by 14.4%. The decline was also notable with Coin which dipped by 14.6%. Bad day all around could have ended in a real bloodbath as there was $280 billion wiped off the market at one point, before the slight recovery. At the end of the day, after the final line was drawn, the total loss of cryptocurrencies market cap was around $200 billion.

Crypto Market Movements Driven by Central Bank and Regulatory Chatter

The dipping trend is not recent news. Bitcoin and other major cryptocurrencies have been in a free fall since November. Compared to the all-time high of $68.979 reached in November, Bitcoin was down by 47.1% by the time markets closed on Friday. However, this slump is by no means an accident. It accompanied the increased regulatory chatter and the change of FED’s approach to monetary policy and inflation. The market was directly hit by the increased regulatory scrutiny. In addition, FED forward guidance has had an impact on both the crypto and the global equity market.

Bitcoin encroaches on gold’s ‘store of value’ status despite recent Crypto selloff

The interconnectedness between crypto and the US equity market has attracted the attention of the IMF earlier this year. The International Monetary Fund has raised concerns about the consequences this relation may have on the global financial market. In addition to IMF’s concerns, the Bank of England has also called for the development of a global crypto regulatory framework.

However, the issues with the crypto market go beyond financial stability and regulatory oversight. On Thursday, members of the US Congress subcommittee held a hearing to gather testimonials from expert witnesses on what impact the Proof-of-Work protocols, which the crypto market is based on, have on the bitcoin bloodbath environment.

On top of all this, another piece of news surfaced last week, additionally hurting the stability of the crypto market. According to the reports, Russia‘s central bank is proposing a ban on cryptocurrencies and crypto mining.

NASDAQ was down by 2.72%

The impact of this news was also felt on the U.S Equity Markets. NASDAQ was down by 2.72% on Friday, totaling a 7.55% slide for the bitcoin bloodbath week. This only further proves the interconnectedness of the markets and may easily lead to even more regulatory scrutiny.

Source: Crypto Bloodbath Continues, with Bitcoin (BTC) Back at July 2021 Levels From

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