Bhoomika Singh
Being super volatile, cryptocurrency tumbles again as bitcoin slips to the lowest till now at US$ 19,843 on 29th august 2022. Since reaching its highest value of US$ 65,000 in November 2021, it is the lowest it has ever gone again.
Consequently, according to a fundamental analysis provider of the crypto market, CoinGecko, the global crypto market cap, today fell below the US$ 1 trillion mark, as it was down over 2 per cent in the last 24 hours at US$ 994 billion.
Investors always wonder about the volatility of the market and live under a cloud of fear, they tend to seek the reason behind this downfall. However, there is no particular reason that comes from the crypto world itself as it does not rely on the industry shares directly, but it fluctuates depending on the speculations of stakeholders.
Reacting to the continued bitcoin breakdown, the Co-Founder and CEO at Unocoin, Sathvik Vishwanath said, “The fall in prices is not restricted to the bitcoin or crypto sector alone but it is seen across all major asset classes. Added to this is the fear that about 137,000 bitcoins from Mt Gox exchange bankruptcy claims could get dumped on the market at once is keeping investors super cautious. This is to be considered a test of time for long-term and mid-term investors.”
“Depending upon their own portfolio this could be an opportunity to average the cost of their digital assets. Intra-day traders should not be affected on a day-to-day basis. The higher risks exist for short-term investors as it is too tough to say if even the present pricing holds for the next two weeks. The related events are causing some damage to spot pricing, but I doubt if it causes long-term dent,” Vishwanath further added.
Reasons behind the fall
Not particularly one, but there are many factors that could possibly be the reason behind the continuous fall of the global cryptocurrency market cap. As the first half of the year has been full of unprecedented events starting from the Russia-Ukraine war to the repo rate rise in the USA.
Also Read: GST Council mulling 28% tax on Bitcoin, other cryptocurrencies
The Russia-Ukraine conflict has shaken the global economy, as big economies have been dealing with constant inflation and hence increasing their respective repo rates. For instance, the Federal Reserve USA has already increased interest rates by 150 basis points in 2022 and is likely to increase rates by another 200 basis points in the remaining months of 2022.
Sequentially, India’s RBI has also been raising the repo rates and the latest rate hike brings the total number of rate increases since May to 140 basis points. This, along with the taxation imposed on virtual digital assets has been affecting the crypto trends globally.
