$200 Billion Wiped Off Cryptocurrency Market as Bitcoin Plunges
Has the Bitcoin bubble popped?
The cryptocurrency market took a nosedive early Monday and Bitcoin (BTC) led the way. The largest form of crypto, BTC dropped 12 percent from a previous day’s high of $32,576. The market as a whole lost $200 billion in value.
The market capitalization or value of the cryptocurrency market was $880 billion at 9:20 a.m. ET, down from $1.08 trillion a day earlier, according to Coinmarketcap.
Bitcoin, the largest cryptocurrency, fell over 12% from a day earlier to $32,576, according to Coin Metrics data. It earlier sank to an intraday low of $30,863. Ether, the second-largest cryptocurrency, was down 23% to $1,005. It briefly tumbled below $1,000, hitting an intraday low of $945.
CNBC quoted Simons Chen, the executive director of investment and trading at crypto financial services firm Babel Finance, who said that this “correction we saw was expected as we believe the BTC price surge recently from under $20,000 to $40,000 in the past four weeks will induce sell pressure.”
According to Chen, Bitcoin hitting $40,000 last week may have prompted heavy selling for profit, hence the dive.
On Friday, Jan. 8, CNN published a piece by Paul R. La Monica asserting that Bitcoin’s big 40k rally could very well “be the ‘mother of all bubbles,'” according to Bank of America.
CNN cited a report from Bank of America Securities chief investment strategist Michael Hartnett, who stated that Bitcoin’s remarkable 1,000% surge in value since 2019 completely outstrips past instances of “investing mania,” but that those past crazes—gold investing in the 70s, Japanese stocks in the 1980s—all saw triple-digit increases before the bubble popped.
In its article about the market plunge, CNBC also quoted crypto venture capital and trading firm Kenetic Capital founder Jehan Chu, who believes this is just a “short term correction” that is “both natural and needed, and is a great entry point for long-term investors as we quickly reach $50k this quarter and $100k by year’s end. So at the moment, BTC investors can choose to simply go with Chu’s estimation that this isn’t a full-on pop and buy low then wait to sell high. The chances are in favor of the market climbing again.
As of noon January 11, Bitcoin was valued at $31,703.00 and possibly on the rise. The best idea, for now, might just be to wait and see if the bounce holds. Keep an eye on the market here: coindesk.com/price/bitcoin.