Since its high in November last year, Bitcoin (BTC), the largest global virtual currency in market value has dropped by half. The decline in the value of virtual currencies coincides with a slump in global stock markets in recent times. Bitcoin was down by about 4.80% and traded at $32,887.76 at the time of writing. Moreover, it is at the level that it was in July 2021.
Major Asian markets fell further on Monday, including Japan’s Nikkei index falling by approximately 2.5%. With a market capitalization of about $640 billion, Bitcoin represents nearly one-third of the total cryptocurrency space. Ethereum (ETH), the world’s second largest cryptocurrency, has also dropped in value, losing well over 10% during the last week.
Even though the cryptomarket was pretty calm for much of 2022, dramatic trading in cryptoassets was not unheard of in prior years.
Individual participants ruled trade for years, but large investors including hedge funds as well as wealth managers have lately entered the market. Cryptocurrencies have progressively mirrored the swings of global equities as even more conventional investors trade digital assets.
Several corporate investors who purchase cryptocurrencies do so as risk assets, comparable to tech stocks. Conventional investors will typically sell risky securities but rather put their money towards safe assets during periods of market instability.
Last week, Bitcoin (BTC), the largest cryptocurrency, had lost a huge 9.50% and traded at $35,779.83 at 8:21 a.m. ET on Friday. The market capitalization stood at $680 billion, down by a massive 9.50%. However, the 24-hour trading volume gained by a massive 44.89% to $49.1 billion. Earlier last month, Bitcoin price slid to below $40k and now it’s following the trend.
At the time of writing, other cryptocurrencies like Solana (SOL), Cardano (ADA) and Avalanche (AVAX) too declined by 7.89%, 10.29%, and 6.41%, respectively.