Bitcoin divides people like no other investment. While some will be mourning their losses after last week's spectacular cryptocurrency crash, others will be celebrating what they hope will be an end to this pointless distraction. All, however, will be wondering what happens next.
Bitcoin fans will be hoping that last week’s blistering sell-off is only a temporary setback and wondering whether they should take the opportunity to buy more in the hope of cashing in on an equally spectacular recovery.
Critics of cryptocurrencies might be feeling vindicated, but they could also be quietly wondering if they should buy some Bitcoin, just in case.
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what are we looking at today — the actual death of Bitcoin or an unmissable buying opportunity?
Even by its volatile standards, the crypto world has gone crazy. Bitcoin is down 60 per cent from its record high, falling from $67,000 last November to a low of $27,000 last week, with Ether, BNB, XRP, Cardano, Solana, Terra’s Luna and others also in meltdown.
The cryptocurrency sector has lost a cool $1 trillion in market capitalisation and, at the time of writing, was valued at $1.3tn. But there could be worse to come, says Sam Kopelman, UK manager of global cryptocurrency exchange Luno.
Mr Kopelman blames the sell-off on “the chaotic combination of interest rate hikes, fears of an imminent recession and military conflict in Europe”.
He warns against rushing to buy the dip as Bitcoin could fall to $20,000 before finding its floor. “This could be the start of a long-term bear market for crypto.”
However, Bitcoin is not the only high-profile victim of these wider trends. US technology stocks, the other great growth story of the post-financial crisis era, are also in meltdown dhaka.
New York's tech-heavy Nasdaq index is down about 30 per cent this year — and the same forces are at play.
What happened to the Bitcoin price, is it the end of the crypto boom?
More than a decade of near-zero rates and multitrillion-dollar stimulus has inflated asset bubbles everywhere but the era of easy money is now over, as the US Federal Reserve increases interest rates and slashes stimulus in a belated attempt to curb today’s raging inflation.
Yet the cryptocurrency market has issues of its own, Vijay Valecha, chief investment officer at Century Financial, says.
The collapse of the hit sentiment and hastened the flight from digital tokens.
“ are key elements of the crypto market, where traders park funds as they move in and out of other tokens. This loss of confidence could be an existential test for the entire digital asset ecosystem,” Mr Valecha warns.