Cryptocurrency prices also fell sharply. The price of bitcoin fell to $ 26,000 on Thursday, 60 percent less than its peak in November, before rising slightly. Since the beginning of the year, the movement of bitcoin prices closely reflects that of Nasdaq, a benchmark that is heavily weighed against technology stocks, which suggests that investors treat it like any other risky asset.
The price of ether has also fallen, losing more than 30 percent of its value in the past week. Other cryptocurrencies, such as Solana and Cardano, are also down.
Any panic may be exaggerated, some analysts said. A Mizuho study found that the average bitcoin owner at Coinbase will not lose money until the price of the digital currency falls below $ 21,000. According to Mr. Dolev, this is the place where a real death spiral can occur.
“Bitcoin worked until no one lost money,” he said. “Once he gets back to those levels, it’s kind of like, ‘Oh my God.’
Professional investors who have experienced crypto volatility have also remained calm. Hunter Horsley, CEO of Bitwise Asset Management, which provides crypto investment services to 1,000 financial advisers, met with more than 70 of them this week to discuss the market. Many did not sell, he said, because every other asset also fell. Some even tried to take advantage of the decline.
“Their point is, ‘It’s not fun, but there’s nowhere to hide,'” he said.
Still, falling prices have shaken crypto traders. Just a few months ago, blockchain supporters predicted that the price of bitcoin could rise to $ 100,000 this year.
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