Bitcoin falls below $ 20,000 as cryptocurrency smelting continues

by · July 9, 2022

Bitcoin plunged almost 10% in less than 24 hours, which has added a number of persistent losses in recent months. It is now below $ 20,000 for the first time since November 2020, down more than 70% from a record high of $ 68,000 per coin in November 2021. Bitcoin has lost $ 900 billion in value since the top.
Ether is also experiencing a so-called crypto winter. The second largest digital token fell 10% on Saturday to $ 975, the lowest level since January 2021. The coin has lost 80% of its value from a record high in November last year.

The massive krypton meltdown is part of a larger market downturn caused by rising inflation, rising interest rates, war in Ukraine, Covid shutdowns and chaos in the supply chain.

This week, the Federal Reserve raised interest rates by 75 basis points, the largest increase since 1994. The change led to a retreat from all assets. The S&P 500 is also in a bear market and posted its worst week recorded since 2020.

The crypto world is raging after the collapse of $ 60 billion last month of two other major tokens, Terra-Luna and Celsius. These losses have raised doubts about the general stability of digital currency.

The pandemic brought a period of hypergrowth to the crypto sector when young investors suddenly floated with stimuli seeking to invest in digital currency and meme stocks. Between March 2020 and November 2021, the price of bitcoin rose twelve times to $ 64,000.

Crypto-adjacent companies are now struggling to survive. Coinbase laid off 18 percent of its employees in June. Gemini, BlockFi and Crypto.com are also cutting jobs.

Still, even at $ 20,000, about half of all bitcoin wallets are still in profit, according to an analysis from Columbia Business School quoted by The New York Times. The study also found that 61% of bitcoin addresses had not sold anything in the last 12 months, suggesting that a total run on crypto can be avoidable.

It is not uncommon for crypto bear markets to pull down between 85% and 90%. Over the past decade, two protracted cryptocurrencies have led to bitcoin losing more than 80% of its value. The coin bounced back – and a little more.

During the 2017 to 2018 cryptocurrency market, bitcoin fell 83%, from $ 19,423 to $ 3,217. But in November 2021, the coin was valued at $ 68,000.

During the same period, etherium fell from $ 1448 to $ 85, a decrease of around 95%. In November 2021, the coin was valued at $ 4850. The bear market between 2013 and 2015 also saw bitcoin fall around 82%, from $ 1,127 to $ 200.

If the current downturn reaches these levels, with bitcoin reaching $ 10,000 and ether at $ 750, “things will start to fall apart,” said Jason Yanowitz, co-founder of Blockworks, a research platform for crypto investors, executives and builders. Companies today are not supposed to operate at these prices. “But while he thinks ether could reach a low of $ 750, he is very doubtful that bitcoin will fall to $ 10,000.

Government officials in DC have become increasingly concerned about what they see as a high-risk investment with so little regulation. U.S. Treasury Secretary Janet Yellen will meet with CEOs of Wall Street banks next week to discuss “the need for responsible innovation in digital assets,” according to the Treasury Department.

Investing in cryptocurrencies is “not something I would recommend to most people saving for retirement,” Yellen said at a New York Times event this week. “For me, it’s a very risky investment.”

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