Bitcoin is down about 50% from its all-time high in November

Investors in bitcoin are losing more and more money as the price of the cryptocurrency continues to fall, below $ 32,000 on Tuesday.

Bitcoin and other cryptocurrency values it started falling last weekreflecting the downward trend that outpaced the markets after the Federal Reserve raise interest rates by half a percentage point.

Excited by recent stock market crashes, many investors have rushed to toss their bitcoin and other volatile digital currencies in favor of more stable investments such as U.S. Treasury bonds, some cryptocurrency observers said. Last week, there were nearly 43,000 requests to buy or sell bitcoins in cryptocurrency exchanges, representing about $ 3.1 billion in bitcoins, according to data from blockchain analytics firm Glassnode.

“This is the largest influx of transaction activity since mid-October 2021, when we began tracking,” Glassnode analysts said in a report released Monday. “This further supports the case that bitcoin investors were trying to reduce risk, sell or add collateral to the margin in response to market volatility.”

The Glassnode report also found that investors who abandoned their bitcoin paid $ 119,000 combined in fees on cryptocurrency exchanges for transactions and that about 15.5% of bitcoin wallets have suffered unrealized losses. during the last month.

Considered highly unstable by some financial experts, bitcoin hit its highest price of $ 68,000 last November, in part because more companies like PayPal, Etsy and Whole Foods began accepting it as a form of payment. The world’s largest and most popular cryptocurrency has now dropped 49.5% from its November high, Glassnode said. As of Tuesday afternoon, it was trading at around $ 31,600.

The price of Bitcoin is falling even though well-known financial institutions are starting to use the digital asset. Fidelity Investments announced last month that it did offering a bitcoin option to 401 (k) accounts. Goldman Sachs lent money last month with the support of bitcoin, a novelty in the company’s history.

“Long-term potential”?

Analysts said they still believe that cryptography is an ideal investment to buy and hold. Edward Moya, a senior market analyst at Oanda, said last week that “there are many long-term potential value“for investors who keep their bitcoin.

The fall in the price of bitcoin has nothing to do with what is happening in the crypto world, said Mauricio Di Bartolomeo, who runs Ledn, a bitcoin lending service in Toronto. Rising interest rates, rising inflation and other changes in the macroeconomy are the real culprits, he said.

Di Bartolomeo said bitcoin has surpassed the NASDAQ by 10% since March 2019 and gold by 16% since that same period, which is why cryptocurrency is still worth the risk.

“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 are still valid today,” Di Bartolomeo told CBS MoneyWatch. “With growing adoption and banks like Goldman Sachs beginning to get involved, the current environment may offer some buying opportunities for investors with long-term conviction.”

In:
• Cryptocurrency
• Bitcoin