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Financial markets, including cryptocurrencies, continue to continue their rapid decline. Bitcoin is already trading in the region of $23,000, the decline in the past 24 hours alone was over 15%. Altcoins are no less sad: Ethereum sank to almost $1,000, and Dogecoin became one of the anti-leaders, which fell in price by more than 30%.
The US stock market is also not happy showing negative indicators.
Consequences of the fall
According to CoinMarketCap, the capitalization of cryptocurrencies has fallen below $1 trillion. Thus, since the beginning of 2022, the market has lost more than $1 trillion. In addition, the index of fear and greed is at level 8 "Extreme fear". Let's take a look at how the sharp decline and continued downtrend has actually affected the digital asset industry.
Outflow of funds
Against the backdrop of accelerating inflation, investors prefer to get rid of high-risk assets, which is the crypt. Naturally, this leads to an outflow of funds. Yesterday, the analytical portal CoinShares released a report, according to which over the past week the outflow of funds from digital assets amounted to $102 million, of which $57 million came from Bitcoin.
Now we are seeing record losses of large crypto investors. So, the losses of El Salvador, which legalized bitcoin last year and regularly bought it, amounted to $46 million.
The losses of the largest institutional BTC investor MicroStrategy, which has 129,218 coins on its balance sheet, exceeded $1 billion. Recall that the average purchase price was $30,700.
The bullish trend that ended in November of last year and led to the growth of the market capitalization to $3 trillion provided huge profits for cryptocurrency companies. However, many organizations are no longer able to maintain their previous level of operations.
The Crypto.com platform announced the reduction of its staff by 5% (260 people). CEO Chris Marszalek said that such measures are necessary to optimize profitability and ensure long-term development.
Cryptolending platform BlockFi decided to act even more radically, more than 850 people or 20% of its employees. Other measures include cuts in the marketing budget and cuts in executive salaries.
What will happen next
The economic situation in the world is now extremely unstable, which puts serious pressure on financial markets. It is important to keep a cool head and not to panic. The cryptocurrency market has experienced periods of recession before, which also forced investors to sell assets at a loss due to fear.
“Hope dies last” and the current fall does not mean that the market will not develop. Most of the crypto fund managers surveyed are trying to remain optimistic and still predict that Bitcoin could reach $100K by the end of this year. Of course, no one can know for sure how the market will behave, but large investors continue to hold on to assets.
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CoinShark is not responsible for the content, accuracy, quality, advertising, products, or any other content posted on the site. This article is for informational purposes, prepared on the basis of materials and information from KUNA open sources. Cryptocurrency is a high-risk asset, investing in it can lead to losses. Readers should do their own research before taking any action.