BTC fell about 60% after exceeding $ 67,000 ($ 55,375) six months ago, and was trading at about $ 28,000 at the time of writing. The common cryptocurrency market, which includes other digital currencies such as Ethereum and Dogecoin, has lost more than $ 1 trillion (£ 830 billion). Bitcoin problems do not end there.
The total value of bitcoin is still estimated at about $ 1.3 trillion, but may continue to decline as global volatility continues. So are we finally witnessing the death of bitcoin?
Many people will be happy to see that bitcoin will disappear forever, given that it still has no practical value, while mining virtual coins on computers generates more greenhouse gas emissions than Bangladesh.
It has also fueled the culture of online enrichment, which has turned the first few investors into billionaires and impoverished millions behind.
BTC is falling because of a “chaotic combination of rising interest rates, fears of a future recession and military conflict in Europe,” said Sam Kopelman, director of the global cryptocurrency exchange Luno in the UK.
That could mean a long-term bear market for cryptocurrency, he said, and urged investors to resist the temptation to buy the current fall in hopes of getting a quick recovery. “The collapse in bitcoin prices may not be over yet. Support can be found for $ 20,000.
However, bitcoin fell sharply before hedging just as quickly, and it’s too early to cancel.
Cryptocurrency is falling for the same reason as other high-risk, high-reward assets. Because investors are getting nervous and do not want to take much risk.
Nasdaq’s New York Stock Index fell 30 percent this year. Technology growth stars such as Netflix, Facebook and Amazon are now facing a much tougher business environment as fears of a recession grow.
Customers are squeezed by the cost of living crisis, while the cost of loans is rising as central banks raise interest rates to curb inflation.
READ MORE: Cryptocurrency crash: bitcoin goes to record series of losses after crash
The accident shattered the myth of bitcoin that it is now a safe haven in difficult times. Or “digital gold”, as some call it. Instead, it fell faster than almost any other asset class.
Two other historic refuges, gold and silver, have also fallen, said Fawad Razakzada, a market analyst at City Index. “Like bitcoin, they are struggling because they are not giving investors any interest or dividends.”
The collapse is a difficult pill for many young investors, who often risk exposing themselves, said Myron Jobson, senior personal finance analyst at Interactive Investor.
His research shows that cryptocurrency is the choice for 45% of teens aged 18-29. “An alarming amount financed this with credit cards and other forms of credit, leaving them with a double whammy of lost investment and debt, exacerbated by rising interest rates.”
They can only hope that bitcoin will recover, says Jobson. “Cryptocurrency evangelists say the market fell before rising sharply to record highs, but as interest rates rise and the economy slows, we find ourselves in another world.”
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The global stock market has abandoned a global slowdown to maintain stability this year, the British FTSE 100.
Stocks of blue chips in the index, such as BP, Lloyds, Persimmon, Unilever and Vodafone, bring some of the most generous dividends in the world, protecting investors from inflation.
The FTSE 100 index has fallen less than 5% since the beginning of the year, which is good news for millions of Britons who invest in pensions, stocks and shares of Isa. Unlike bitcoin speculators, they were protected from this year’s worst crash.
It’s very cool to see how boring old FTSE crushes futuristic cryptocurrencies.