Bitcoin Down: Cryptocurrency Crashes Below $30,000
Investors in bitcoin, the popular cryptocurrency that first came on the scene in 2009, are losing money. After other cryptocurrency values began to fall last week, Bitcoin on late Monday dropped below the $30,000 mark, signaling a nearly 55% fall from its November peak of nearly $69,000.
The massive drop was revealed in a new Glassnode report, which noted that the world's most popular cryptocurrency was more than 12% lower on the day. Although bitcoin later recovered and was trading at $31,245.48 on Tuesday, according to data from Coin Metrics, per CNBC, the Monday drop marked the first time bitcoin traded below $30,000 since July 2021, when the digital asset traded as low as $29,839.80. At its peak, bitcoin traded for around $69,000 in November 2021.
The Glassnode report, which found that 15.5% of bitcoin wallets have suffered unrealized losses over the past month, noted an influx of "urgent transactions" as investors rush to trade their bitcoin and other digital currencies for more stable options, such as U.S. Treasury bonds. According to the report, there were almost 43,000 requests to buy or sell bitcoin placed on crypto exchanges last week. This represented more than $3.15 billion in value. The Glassnode report said, "this is the highest influx in transaction activity since mid-October 2021 when we started tracking. This further supports the case that bitcoin investors were seeking to de-risk, sell or add collateral to margin in response to market volatility."
The price drop came amid a broader, multi-day sell-off hitting much of the cryptocurrency market. CNBC reported Wednesday that stablecoin TerraUSD, or UST, plunged to as low as 31 cents Wednesday morning, last trading at less than 50 cents. Sister token luna, meanwhile dropped 95% to just $1.69, erasing more than 98% of its value in the last seven days. Bitcoin, meanwhile, fell about 1% to $31,378.
According to Mauricio Di Bartolomeo, who runs Ledn, a bitcoin-lending service in Toronto, Bitcoin's continuous downfall doesn't have to do with things happening in the crypto world, but rather boils down to higher interest rates, rising inflation, and other changes in the macroeconomy. Di Bartolomeo, however, shared that cryptocurrency may still be a sound long-term investment. He told CBS MoneyWatch, "while there may continue to be short-term pressure in (crypto) markets due to macro factors, the attributes that make bitcoin a great long-term investment still hold true today. With increasing adoption and banks like Goldman Sachs starting to get involved, the current environment can offer some buying opportunities for investors with long-term conviction."