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The price of Bitcoin (BTC) has seen a destructive week, as the price crashed 52% on one single day this week. One of the most massive crashes witnessed since the existence of Bitcoin.
Not only has Bitcoin been hitting hard during the week, but equity markets have also seen their worst week since 2008, and other safe havens gold & silver have seen a selloff. Cash is king, is the idea. However, are we continuing dropdowns, or are we temporarily done?
While many stories in the media paint Bitcoin mining as a key to easy riches, this isn’t always the case; over the past few months, it has been estimated that the cost of mining a single BTC came in around $8,000, assuming standard electricity prices and the newest publicly-available hardware.
Prior to the market carnage on March 12, the Grayscale Bitcoin Trust (GBTC) had acquired over 300,000 BTC. Grayscale’s trust has been one of the longest-running FINRA approved investment vehicles with bitcoin assets under management. On Feb. 5, GBTC shares climbed more than 10% that week and investors were also paying a 20-30% premium. Since then and after the market downturn on Thursday, GBTC shares are down 45% from $11.52 to $6.32 per share.
There is an increasing fear across the crypto market as the world continues to battle the COVID-19 pandemic virus. In the past week, the price of Bitcoin (BTC) tanked below the $3,600 USD level ringing alarms as the market turned extremely bearish. However, as the situation on the medical space gets better there is a possibility that Bitcoin (BTC) will get back to its best, at least as Google Trends data signals.
Previously seen as a possible safe haven in difficult times, investors now seem to be selling out of bitcoin to take back liquidity in case the coronavirus spreads even further. In a time of uncertainty, many investors might feel it is better to own cash or gold rather than more speculative crypto assets like bitcoin, while others might be looking to free up cash to invest in stocks if and when the situation starts to improve.
“Bitcoin was born in 2008, during the winter of our financial discontent. It has already weathered much to be here, and it seems unlikely to give up anytime soon. It will emerge from this current calamity stronger than ever. Decades are not measured in days.” – Tyler Winklevoss Tweeted.
The crypto market experienced its worst single-day loss on March 12 as multiple cryptocurrencies prices plunged by more than 30% within 24 hours. Bitcoin alone lost around half its value while approximately $100 billion was wiped out of the entire market. This day earned the undesirable tag of the greatest daily loss and a place in the history books.
The downtrend continued to a low of $101 on March 12. Later, Ether pulled back above $120 and resumed consolidation. As the market is oversold, buyers are likely to emerge. The uptrend is likely if the price is sustained above $120 support.
A rally is possible if the bulls defend the support and maintain the price above it. A rally above $140 is expected, followed by the resumption of an upward move. Nonetheless, if the support is held for days, we will assume that the bulls have taken control of the market. It will also mean that the downward move has subsided.
Although all cryptocurrencies have had it tough over the past few weeks, XRP has been hit especially hard. The altcoin, the third-largest crypto asset by market capitalization, fell as low as $0.105 on Thursday from its 2020 high of $0.345 established just weeks earlier, marking a drop of 70%.
Following the recent major bitcoin and cryptocurrency market crash, popular influencer WhalePanda tweeted that he could “no longer recommend” trading on BitMEX, following criticism of the platform’s handling of the situation.
- Bitfinex CTO Paolo Ardoino explained in a recent interview how the exchange profits from USDT.
- The exchange was forced to use Tether reserve funds to cover $850 million in losses incurred by its fraudulent payment processor Crypto Capital.
Just like there always have been, scams are found in the digital currency space. There will always be those who are too inept to make a decent living and want to take advantage of situations in order to line their own pockets. As the coronavirus has gripped the world, there’s no doubt that it is being used as a tool for initiating fraudulent activity, and the U.K.’s Financial Conduct Authority (FCA) has issued a warning to remind individuals to use caution when approached about making investments related to COVID-19.
Nearly two years ago, the Japanese crypto exchange Coincheck suffered from a major hack. During that incident, millions of dollars worth of NEM currency were taken by criminals.
Despite several investigations, not all of that money was retrieved. In fact, not much happened regarding this incident for quite some time.
Coinbase co-founder and CEO Brian Armstrong says people are turning to new sources for factual information on the internet. The process is a move toward information decentralization and away from centralized media, a trend that parallels the emergence of decentralized digital currencies such as Bitcoin and Ethereum that are not controlled by a central government, institution or authority.