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The cryptocurrency crisis of 2018 has had its worst week yet.
Bitcoin sank below the $ 4,000 mark Saturday and most of its peers tumbled on Friday, extending the Bloomberg Galaxy Crypto index's decline since Nov. 16, to 25%. This is the worst weekly depression since the crypto-mania that peaked in early January.
After an epic rally that has surpassed many of the most famous bubbles in history, crypto-currencies have stuck in a nearly $ 700 billion rout that shows little sign of slowing down. Many of the concerns that triggered the withdrawal in 2018 – including increased regulatory oversight, internal community quarrels and exchanged cookies – have intensified further this week. Even after losses of over 70% for most virtual currencies, Stephen Innes of Oanda Corp. has still not seen solid evidence of a capitulation that would mark a market trough.
"There are still a lot of people in this game," Innes, the Asia-Pacific Trade Manager at Oanda, said over the phone from Singapore. If Bitcoin "collapse, if we start to see a drop to $ 3,000, this thing will become a monster." People will rush to the outs. "
Innes said its baseline scenario predicted that Bitcoin would trade between $ 3,500 and $ 6,500 in the near term, with a potential drop to $ 2,500 in January.
The largest cryptocurrency fell more than 10% Saturday, according to Coindesk. With $ 2,880, it is trading close to its lowest closing level since September 2017. The market value of all the crypto currencies tracked by CoinMarketCap.com has dropped to $ 140 billion, down from $ 835 billion. dollars recorded at the market summit in January.
The biggest losses of the rout: individual investors who have accumulated just when prices peaked, and companies like Nvidia Corp. who provided the crypto ecosystem. The chip maker based in California has lost nearly half of its value since the beginning of October, the demand for its cryptocurrency extraction chips has collapsed and the division of games has been disappointed.
Until now, the economic impact of crypto collapse was limited, in part because most major banks and institutional fund managers had little or no exposure to virtual currencies. For most investors, recent declines in equity markets may have been much larger: the $ 700 billion drop in digital assets since January compares with the $ 1.3 trillion lost in the market value of global equities this week.
Some crypto-bulls have argued that Bitcoin and its peers would act as havens from the turmoil of traditional financial markets, but this year's losses undermined these claims. Gold, a traditional paradise for investors, has climbed these past two weeks due to the fall of virtual currencies.
"I do not think the coins will be as attractive as some of the other cross asset games," Innes said. "Gold prices will increase dramatically and there is an inverse relationship that we are starting to see with gold and coins."
– Bloomberg News
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