Bitcoin and cryptocurrency prices have fallen sharply as the discount shopping event Black Friday kicks off, dropping along with stock markets around the world that have fallen on fresh fears over a new Covid-19 variant.
Subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and discover hot new NFT and crypto blockbusters poised for 1,000% gains’
“Forget Black Friday; today has been renamed Red Friday after the color of share price screens as stocks slump globally on fears over a new Covid strain,” Russ Mould, investment director at AJ Bell, said in emailed comments.
The bitcoin price fell to its lowest price since mid-October, down 5% on the last 24 hours and dropping under $55,000 per bitcoin. Meanwhile, ethereum, the second-largest cryptocurrency after bitcoin, dropped towards the closely-watched $4,000 per ether level.
The broad bitcoin and crypto sell-off—also hitting Binance’s BNB, solana, cardano, Ripple’s XRP and dogecoin—has wiped around $200 billion from the combined crypto market capitalization since Monday.
Sign up now for the free CryptoCodex—A daily newsletter for the crypto-curious. Helping you understand the world of bitcoin and crypto, every weekdayMORE FROM FORBESNew German Chancellor Olaf Scholz Made A Serious Bitcoin And Crypto Warning Ahead Of The Latest Price SurgeBy Billy Bambrough
The bitcoin price has fallen sharply, with the crypto market dropping sharply as the … [+] post-Thanksgiving discount shopping event Black Friday kicks off around the world. Ethereum, Binance’s BNB, solana, cardano, XRP and dogecoin also plummeted.SOPA Images/LightRocket via Getty Images
“With increased equity market volatility, crypto investors should be on guard,” Alex Kuptsikevich, FxPro senior market analyst, said in emailed comments. He warned the bitcoin price is vulnerable to broad market movements partly due to recent institutional investment that can have a knock-on effect on smaller cryptocurrencies including ethereum, Binance’s BNB, solana, cardano, Ripple’s XRP and dogecoin
“Because of the institutional love affair, bitcoin is substantially vulnerable to moments of exit from risky assets when it sells off everything, regardless of the outlook. And its severe sell-off risks dragging the entire cryptocurrency market down with it.”
However, Kuptsikevich also thinks bitcoin has begun acting as something of a so-called safe-haven asset, with retail investors buying bitcoin in times of increased uncertainty.
“From a different perspective, retail investors have developed a reflex to buy crypto on coronavirus fears, with the WHO discussing new virus variants and restrictions on air travel,” he added.
Other bitcoin and crypto investors are confident the latest crash is only a temporary blip, exacerbated by Black Friday and the Thanksgiving Day holiday.
“The crypto market has been hit by a temporary sell-off that mirrors that of the global stock market amid concerns about a new Covid-19 variant that’s been discovered in southern Africa,” crypto investor and deVere Group chief executive Nigel Green said in emailed comments.
CryptoCodex—A free, daily newsletter for the crypto-curiousMORE FROM FORBESCrypto Price Prediction: Volcanos Could Push Bitcoin To $1 Million In Five Years-Leaving Ethereum, BNB, Solana, Cardano, XRP And Cro In The DustBy Billy Bambrough
The bitcoin price fell to under $55,000 per bitcoin, dragging down the price of ethereum, Binance’s … [+] BNB, solana, cardano, XRP and dogecoin.Coinbase
“Triggered by a mini-wave of uncertainty, the parallel moves of the crypto market and the stock markets highlight that digital assets are now mainstream. The headlines have prompted a knee-jerk reaction, made more pronounced because much of the market was celebrating Thanksgiving and not participating.”
Before the latest sell-off, bitcoin had seen a wave of interest from investors looking to shield themselves from run-away inflation that has spiked around the world in recent months.
“This [bitcoin price crash] will be short-lived, with crypto markets likely to rebound in the near-term as investors once again focus on the heightening global inflation fears,” added Green.
Meanwhile, it was noted the bitcoin price drop came amid a fall in the bitcoin hash rate—a measure of the computing power directed at the bitcoin network.
“Both the hash rate chart and price chart have fallen in tandem this morning in a way that would suggest it is not a coincidence,” Jason Deane, an analyst with bitcoin and crypto research outfit Quantum Economics, said via Twitter DM after spotting the hash rate drop.
“While there are other factors in play, my initial view is that this is a market overreaction to something that seems to be an issue, but isn’t in real terms—such is the strength of a decentralized system. However, in the short term, traders can expect a bumpy ride as the market makes its own assessment.”
Post Comment