The blessed time when bitcoin mocked financial indexes in complete collapse, in the midst of the Covid-19 crisis, seems to be over. Following a pandemic that has fueled speculation in technology stocks, the cryptocurrency star is experiencing sharp prices with high uncertainty, forcing central banks to turn off the liquidity tap. This Thursday, the token, which is exchanged in a decentralized way on the blockchain, fell below $ 27,000, for the first time since July 2021. Bitcoin, which has recently been named by many players in traditional finance, despite its volatility, is experiencing a deeper crisis. confidence?
One thing is for sure, he is less and less indifferent to the effects of global monetary policy, leading to other cryptocurrencies (Ether -33% per month, Litecoin, XRP, Cardano …) After extremely conciliatory measures, central banks, which stimulated financial flows , then stock markets and risk appetite, bitcoin, which has largely infiltrated institutional funds in 2021, is now paying the price. Him price, which fell to $ 25,424 for the night from Wednesday to Thursday, rose to $ 27,645 on Thursday night, up 30% for the month.
From the record figures of November 2021and bitcoin lost 60% of its value, and the capitalization of the entire cryptocurrency market is more than 1,200 billion dollars against 3,000 billion at the highest level. After reaching an estimate of 1 trillion, it will now be halved.
The war in Ukraine, the prolongation of the Covid crisis in China, uncontrolled inflation (+ 7.5% in March in the euro area, + 8.5%, the highest figure for more than 40 years in the US), the reasons for some observers all found: macroeconomic context »caused a shock in the technology sector, which led to cryptocurrency, confirming that bitcoin and others are not really used to fight inflation. “comments Victoria Scolar, analyst at Interactiv Investor.
Is the algorithm reliable?
Enthusiasts of cryptocurrency, created after the mortgage crisis in 2009, sometimes argue that bitcoin, whose problem is solved by an algorithm, not the central bank, so it is a refuge from inflation, like gold. But in this context, the price of gold is holding.
Another element that brings water to the mill of cryptocurrency opponents is the movement observed on the Terra stablecoin, the so-called stable cryptocurrency, which must be pegged to the US dollar. However, due to the liquidation effect, it lost more than half of its value in 24 hours, sowing a wave of panic in the already feverish cryptocurrency market. The digital token has fallen since the beginning of the week due to a flurry of moves to which the crypto algorithm responded automatically. According to CoinGecko, on Wednesday it fell almost 95% to $ 1.69.
The Luna Foundation Guard announced on Monday that it had used the equivalent of $ 1.5 billion in bitcoins and terraces to ensure a stablecoin parity with the dollar without immediate effect.
The creator of terra Do Kwon assured on Tuesday on Twitter that he was going to present a plan to restore the cryptocurrency, but the price of the currency has not recovered.
The Coinbase champion faced a fall
In addition, companies associated with cryptocurrencies listed on the stock exchange have logically suffered from the shock of the sector: shares of the trading platform Coinbase on Wednesday fell 26.4% to its lowest level since listing on the stock exchange a year earlier.
A platform that allows you to buy and sell virtual currencies like bitcoin and ether, benefited from the sharp growth of this asset class in 2020 and 2021.
If the number of monthly active users increased by 51% in the first quarter compared to the same period in 2021 to 9.2 million, it is 19% less than in the previous quarter. And, according to Coinbase, the outflow of users will continue this quarter.