Synopsis
The world’s most dominant cryptocurrency, Bitcoin, dropped below $30,000 and touched a 52-week low on Monday. It was trading at $31,350 at 5 pm IST on Tuesday. Bitcoin has been dropping ever since it touched an all-time high of $68,789.63 in November.AgenciesBitcoin’s value has more than halved since a November surge that saw the token hit a record of nearly $69,000.Mumbai: Indian investors who jumped on to the cryptocurrency bandwagon in droves in 2021 are extending their losses in the continuing meltdown in digital currencies as the bears tighten their grip on the market. At 5 PM IST, on CoinMarketCap, the global crypto market cap stood at $1.45 trillion, a 3.56 % decrease over the last 24 hours.
The world’s most dominant cryptocurrency, Bitcoin, dropped below $30,000 and touched a 52-week low on Monday. It was trading at $31,350 at 5 pm IST on Tuesday. Bitcoin has been dropping ever since it touched an all-time high of $68,789.63 in November.
Similarly, altcoins popular with Indian investors declined sharply.
In the last 7 days, Ethereum has dropped 16.15% ($3,272.45), Binance Coin slid 17.24% ($320.55), Solana dipped 20.73% ($69.33) and Cardano dropped 14.46% ($0.6724). Terra has dropped 50.69% in the last 24 hours ($32.70) and 64.315% in the last 7 days.
Experts say that most of the new Indian investors had only witnessed a bull run and were used to crypto prices moving northwards, but now they are in for a rude shock as their portfolios have eroded sharply in the last few days.
“Bitcoin usually goes through a 2-year bull phase, which is followed by a 2-year bear period. A lot of newbies are scared and confused since crypto was also their first financial investment
,” said Aditya Singh, co-founder, Crypto India.
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The most impacted were the Indian investors who chased higher returns by investing in momentum cryptos driven by hype on social media channels and manipulated pump-and-dump schemes.
While the new investors are selling, the sophisticated buyers have been buying more digital assets. “We are seeing many who are averaging their positions; so, it may not be a bad time to get into the cryptos,” said Sathvik Vishwanath, co-founder, Unocoin.
Crypto market experts say that a plethora of reasons have led to a selloff in risky assets like crypto and tech stocks: the Federal Reserve tightening its monetary policy, the Ukraine-Russia conflict, supply-chain issues due to rising Covid-19 cases in China, and runaway inflation.
“The global financial markets are battered by rising inflation and growing geopolitical tension. The traditional and crypto markets are experiencing broader selloffs due to macro-economic factors such as interest rate hikes by the central banks around the globe,” said Shivam Thakral, CEO, BuyUcoin.
The immediate trigger for the market rout has been the tech stock selloff.
According to crypto data provider Kaiko Research, the 30-day rolling correlation between Bitcoin and the Nasdaq 100 hit an all-time high of 0.8 on Monday.
Market experts say that the volatility will continue for some time due to the global macroeconomic uncertainty.
“The pain will continue for investors till inflation is not brought under control. The central banks will continue raising interest rates and risky assets like cryptocurrencies will continue to be volatile,” said Edul Patel, co-founder, Mudrex.
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