Cryptocurrency: digital assets in full “storm”, Cryptocurrencies

In the world of cryptocurrencies, experts often say that when an asset has lost 99% of its value, it can drop another 99%. For weeks, digital token holders have felt like they hit rock bottom, but the days go by and look the same: Bitcoin has lost 27% in a week and almost 70% since its all-time high on Nov. 10, 2021, when it reached $69,000. Just yesterday, it dropped to $20,822 at its lowest point before rising slightly. It was holding at $22,400 this morning.

According to Simon Peters, market analyst at eToro, this sudden drop is due to “fear of accelerating US inflation”he said in a press release. U.S. monthly inflation eased from 8.5% to 8.3% in April, suggesting that price increases have reached their “peak”, but a new 8.6% last reached on Friday shocked equity markets and cryptocurrencies. »

He believes that the correlation with the stock market is becoming more and more noticeable: “Most of [de la chute] happens because institutional holders calibrate their risky assets the same way, be it tech stocks or bitcoin. »

Craig Erlam, market analyst at Oanda, shares his take on the macro side. We entered, as he said, into “Cost of Living Crisis”. He still believes that the change in tone at the European Central Bank, which has finally decided to raise its key rate, is affecting the cryptocurrency market.

Celsius highlights the fall

“$20,000 suddenly seems very vulnerable.He wrote. The worst may be yet to come […] Market conditions were already far from optimal – high risk aversion and the expectation of higher interest rates – but add to that a major cryptocurrency lender freezing withdrawals and it really is the perfect storm. »

He cites challenges faced by Celsius, a reimbursable savings and digital asset lending company. It has indeed suspended withdrawals since yesterday, adding to the atmosphere of panic in the markets. Worse still, the largest exchange in the world, Binance, is also had to temporarily stop bitcoin transfers. The break lasted only three hours, Monday, for the latter, but it is not yet possible to return his money on the former.

“Everything indicates that Celsius will thus become insolvent, which will become a new tsunami in the ecosystem.judge Pierre-Yves Dittlo, CEO and founder of Ledgity. […] In this case, we would be faced with poor risk management rather than the question of underlying technology and innovation. »

Recall that Bitcoin has already lost 80% of its value since the 2017-2018 bubble. The dramatic fluctuations it experiences throughout the year is not uncommon. And if many savers, unfortunately, lost money in this crash, then others are calm and calmly speaking out on social networks.