Bitcoin is in free-fall, plummeting to a new low as the crypto community descends into panic.
The price of the world’s largest cryptocurrency, a joke to many, dropped over 8% to a laughable $53,523, wiping out billions in value in a matter of hours. The token, which has been a symbol of the crypto elite’s excesses, is now in uncharted territory, sparking warnings of a full-blown market meltdown.
Ethereum, the token of choice for dodgy ICOs, isn’t faring much better, tanking 9% to an embarrassing $2,841, an over two-month low. Meanwhile, the Nasdaq, the bellwether of the US market, continues to defy logic, climbing higher despite the crypto carnage.
Rumors are swirling that Mt Gox, the infamous exchange that tanked the crypto market a decade ago, may finally start returning bitcoin to creditors, sending shockwaves through the crypto community. But is this a sign of recovery, or just a desperate attempt to cling to the last vestiges of the dying crypto dream?
“This is just the beginning of the end for the cryptocurrency bubble,” warns Tony Sycamore, a market analyst at IG. “The crypto community is in denial, but the truth is that the market is in shambles, and there’s no stopping it.”
But what’s behind the carnage? Some say it’s the looming threat of a Joe Biden loss in the US presidential election, sparking fears that the new administration will come down hard on the crypto community. Others claim it’s the inevitable consequences of years of reckless speculation and reckless promises of “moonshot” profits.
A bright start, a bleak future
Bitcoin had a stellar start to the year, thanks to the launch of exchange-traded funds in the US, but it’s since gone sideways, and now it’s careening out of control. Will it bounce back, or is this the end of the line for the once-hyped token?
“With an asset that’s been rangebound for quite a while and recently in the lower end of that range, there are plenty of margined positions waiting to be wiped out,” says Justin D’Anethan at digital assets market maker Keyrock. “This of course creates a cascading effect, pushing prices further down than it might in a market with less leverage.”
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