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As more than $ 1 trillion cryptocurrency has disappeared in just six months

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As more than $ 1 trillion cryptocurrency has disappeared in just six months

The escape of traders from risky investments has halved the price of bitcoin and other cryptocurrenciesthe destruction of digital money worth more than $ 1 trillion since November.

Wild fluctuations are quite common with cryptocurrencies, but even experienced investors remain confused as bitcoin fell 29% over a seven-day losing streak that just ended as a stablecoin – part of the crypto world that advertised its stabilitysuddenly crashed.

Investors are looking at a turning point in financial markets when interest rates are rising and inflation is raging and they are responding by selling risky assets.

For the crypt it was an unstable journey into the depths.

Last year, cryptocurrencies were on fire and seemed to have gained more legitimacy after years of being considered a marginal, speculative product.

Tesla Inc.

TSLA 6.09%

said he bought $ 1.5 billion in bitcoinspushing prices up.

Coinbase Global Inc.

COINS 16.78%

listed his shares in the first major public placement of bitcoins.

In November, bitcoin and etherium, two of the most popular cryptocurrencies, reached historic highs. The value of bitcoin at 5pm on Nov. 9 was $ 67,802.30; Ethereum cost $ 4,800. They have now fallen by 58% and 60% respectively from these levels.

Sources: CoinDesk (bitcoin); Kraken (ethereum, dogecoin); CoinMarketCap (Shiba Inu)

Sources: CoinDesk (bitcoin); Kraken (ethereum, dogecoin); CoinMarketCap (Shiba Inu)

Sources: CoinDesk (bitcoin); Kraken (ethereum, dogecoin); CoinMarketCap (Shiba Inu)

Sources: CoinDesk (bitcoin); Kraken (ethereum, dogecoin); CoinMarketCap (Shiba Inu)

Sources: CoinDesk (bitcoin); Kraken (ethereum, dogecoin); CoinMarketCap (Shiba Inu)

Cryptocurrencies fell before last week, fell victim to sky-high inflation. Bitcoin and other digital currencies they were talked about as hedging inflation. But the ripple effect played out differently. Rising inflation is pushing the Fed to raise interest rates faster, which investors say will slow economic growth. The result: investors unload risky assets, including cryptocurrencies.

Also exacerbating the loss is the fact that crypto-trading, originally a game for individual investors, is now dominated by institutional investors such as hedge funds. Those who sought diversification into the crypt were caught in the error.

As the price fell, both individual and institutional investors retreated. If Coinbase reported first quarter results late Tuesday it turned out it was bleeding from users. By the end of trading on Thursday, Coinbase shares were 82% lower than they closed after the first day of trading just over a year ago.

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Write Peter Santili at peter.santilli@wsj.com and Cory Dribush at corrie.driebusch@wsj.com

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