Strong bitcoin sell-off raised concerns that bubble cryptocurrency is about to crack
Bitcoin lost 26% between Sunday and Monday, the biggest drop in two days since March. After recovering some of the space it had lost during the European session, digital assets have returned to drop more than 20% during New York trading hours.
“It is necessary to consider whether this is the start of a major revision. But now we see that this parable is broken, so it might be”Said Vijay Ayyar, head of business development at Luno exchange in Singapore.
The value of bitcoin has more than quadrupled in the past year, sparking memories of the 2017 craze that made cryptocurrencies. It was a household name before the price dropped sharply. The price hit nearly $ 42,000 on Jan. 8, and retailers and Wall Street investors cheered for the action.
“It’s a parabolic movement.“Said Matt Maley, chief marketing strategist at Miller Tabak + Co.”And what about all the parabolic motion? Saw a drastic fix”.
While Maley estimates bitcoin will rise significantly in the long run. But it will be radically resolved along the way, he said.
”You’ll still be dropping significantly, between 30% and 60%.“, Said.”And it will happen more than once”.
Bitcoin was down 20% to $ 30,486 as of 11:39 a.m. in New York. Other currencies such as bitcoin cash, ether and litecoin were damaged even more.
“It’s time to get some money from the table.“Scott Minerd, Chief Investment Officer of Guggenheim Investments, in a tweet from his verified Twitter account.”Bitcoin’s parabolic rise is not sustainable in the short term.At the end of December, Minerd predicted bitcoin could hit $ 400,000.
True bitcoin believers argue that this rally differs from previous rapid growth cycles as the assets matured along with the entry of institutional investors and were seen as a legitimate hedge. According to the law against the weakening dollar and currency. Inflation risk
Others were concerned that the rally was cut for reasons and was driven by massive economic and monetary stimulus, and that bitcoin is unlikely to serve as a viable financial option.
With so many investors wanting to get rich from bitcoin, assets are getting the attention of regulators. On Monday, the UK’s financial regulator issued a stern warning to consumers looking to profit from cryptocurrencies: Prepare to lose everything.
“Investing in crypto assets or the investments and loans linked to them generally involve a very high exposure to investors’ money.The Financial Conduct Authority (FCA) said in a statement.
FCA’s concerns include price fluctuations, the complexity of the products it offers, and the lack of consumer protection regulations across multiple products.