In the past week, both the global and the crypto markets have faced serious downsizes, with gold going down -2% over the weekend.
The cryptocurrency is not the only cause of the latest crash, De-Fi (Decentralized finance) and some providers in the De-Fi space called Ce-Fi (centralized finance) also have a role to play in it. These platforms act like banks and give out loans with an interest rate as high as 20%. Unknown to the users, these lenders were using their funds to gamble on other investments, and these actions directly or indirectly affected the market.
This bear market is a great lesson for people to understand that cryptocurrency is not just a get-rich-quick scheme but a market with investment, profit, and loss. It should be understood that there are a lot of risks present in cryptocurrencies.
Although crypto markets are trying to make a comeback, the price of Bitcoin is still around $21,000, and Ethereum may rise above $1,500. Despite the wild sell-off in crypto in recent days, many Bitcoin holders are still in the green, as analysis from glasdnode shows that more than 60% of wallets are still worth more than when they initially purchased Bitcoin.
There has been full-scale liquidation across digital assets in which tether, the largest stable coin, has seen its market drop 63 billion dollars from 83 billion dollars last month, and the entire crypto market value dropped from about 1.3 trillion dollars to 890 billion dollars.
This dip has also touched the smaller coins, most even more than Bitcoin, as the market is suffering from the consequences of some decisions made by a few investors.
Because crypto had crashed before and bounced right back, there are questions surrounding this new wave in the market.
Will Crypto bounce back again? Or,
Will the dip just get deeper?
Image Source – Forbes