Crypto-crash: digital assets in full “storm”, Cryptocurrencies

In the world of cryptocurrencies, experts often say that once an asset has lost 99% of its value, it can fall another 99%. For several weeks, owners of digital tokens have felt that they have hit rock bottom, but the days go by and look alike: bitcoin has lost 27% in one week and nearly 70% since the record of November 10, 2021, date. where it had reached $ 69,000. Only yesterday it fell to $ 20,822 at its lowest before rising slightly. It held at $ 22,400 this morning.

According to Simon Peters, market analyst at eToro, this sudden drop is due to one “fears of accelerating US inflation”he said in a press release. Monthly inflation in the US fell from 8.5% to 8.3% in April, indicating that price increases had ‘peaked’, but a new hit of 8.6% by Friday shook the stock and crypto markets. »

He believes that the connection with the stock market is increasingly significant: “A big part [de la chute] due to institutional holders calibrating their risky assets accordingly, whether they are tech stocks or bitcoins. »

Craig Erlam, market analyst at Oanda, shares his opinion on the macroeconomic aspect. We have, according to him, gone into one “cost of living crisis”. He still believes that the change of tone in the European Central Bank, which has finally decided to raise its key interest rates, is affecting the cryptocurrency market.

Celsius highlights the fall

“The $ 20,000 suddenly seems very vulnerablehe wrote. The worst may not have come yet […] Market conditions were already less than optimal – high risk aversion and expectations of higher interest rates – but add to that that a large cryptocurrency lender freezes withdrawals, and it really is the perfect storm. »

He refers to the problems faced by the company Celsius, which specializes in interest-bearing savings and loans of digital assets. It has actually suspended buybacks since yesterday, which has exacerbated the climate of panic in the markets. Worse, the largest stock exchange in the world, Binance, also in stride had to temporarily stop bitcoin transfers. The interruption lasted only three hours on Monday for the latter, but it is still impossible to get your money back on the former.

“All indications are that Celsius would therefore be insolvent, which would be a new tsunami in the ecosystem.Judge Pierre-Yves Dittlot, CEO and founder of Ledgity. […] In this case, we would be in the presence of poor risk management, not a question mark over the underlying technology and innovation. »

As a reminder, bitcoin had already lost 80% of its value after the bubble in 2017-2018. The dramatic fluctuations it experiences over a year are not unusual. “A price of $ 20,000 remains higher than all periods prior to the year 2021”relativizes Alexandre Stachchenko, blockchain director at KPMG. “The short-term trend is dictated by trends that follow the market, but in the long run, if you look at the fundamentals, bitcoin is rising. » While many savers unfortunately lost money in this crash, others are calm and express themselves calmly on social networks.

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