The Bloomberg News reported on the 19th (local time) that cryptocurrency (virtual currency) has evaporated more than about 600 billion dollars (about 680 trillion won) amid great volatility over the past week.
The value of the total of more than 7,000 cryptocurrencies tracked by CoinGecko, the largest data providing platform in the virtual asset industry, has decreased by more than $600 billion last week, reaching $1.9 trillion.
Bitcoin, the largest, fell about 11%, below $40,000. It is about $25,000 down from the record high last month.
The huge volatility of cryptocurrency comes from several factors, including Elon Musk, Tesla’s CEO, criticizing the environmental impact of energy use for bitcoin mining, and the risk of regulatory pressure on the investment law enforcement zone. In addition, it seems that profit-making sales have been poured out in the meantime.
Jeffrey Halley Oanda, senior market analyst, said, “$40,000 is a’significant turnoff’ for Bitcoin, and it’s not impossible to fall below $30,000.”
The cryptocurrency market surpassed $2 trillion for the first time in the beginning of last month, and doubled in about two months amid high interest from optimistic institutional investors. But now, 600 billion dollars have been blown away amidst the weakness.
Mike McGlon, product strategist at Bloomberg Intelligence in New York, said the decline in Bitcoin’s 120-day moving average was the largest since last year. He expects Bitcoin to stabilize at an average of about $49,000 in 2021.
Technicians point out that bitcoin futures have a bearish market pattern on the head and shoulders, indicating the possibility of further declines in the future.
Bitcoin price against gold has fallen to its lowest since early February. This came from amid rising alertness over speculative assets as well as economic recovery after the corona 19 epidemic.
After bitcoin retreating after hitting a high in the middle of last month, Ether, the second place in the cryptocurrency price ranking, showed a rally and drew attention. However, this is also currently stagnant.
“The craze must be calmed down,” said Chris Weston, head of Melbourne Pepperstone Group’s research team, and said it would stop short trading (selling) and long trading (buying) bitcoins.
The largest Bitcoin fund, the Grayscale Bitcoin Trust, is approaching the largest asset depreciation ever.
If it turns into an exchange-traded fund as planned, this downtrend could disappear. However, there is also a possibility that further declines will occur due to uncertainty over whether US officials will allow the Bitcoin Listed Index Fund (ETF).
