Though a slump of the same degree occurred about eight years ago, this time there is cause for concern due to the increase in risk perception. Now, investors, both individual and institutional, would take a cautious stance when it comes to putting their money in the cryptos.
Having lost about three-fourths of its value this year alone, Bitcoin is unlikely to rebound as quickly as it did in the past
The fate of Ripple and Ether, the second and third largest digital currencies by market cap, is no different and investors lost several millions of dollars this weekend. The selling activity shows that unlike in the past, even long-term investors are turning apprehensive about the heightened volatility. Moreover, experts caution that the bear market is going to stay much longer compared to the previous instances.
Adding to the bearish trend, the ongoing efforts to have Bitcoin included in the Exchange Traded Fund suffered a setback this week after the Securities and Exchange Commission extended the review period for the proposal. The growing negative sentiment in the virtual currency market is evident from the traders’ reaction to the SEC move.
Meanwhile, a section of market watchers remains bullish about the recovery of the market, bringing some relief to investors. The optimists even predict a faster turnaround compared to that of the conventional stock market.
Since the beginning of September, the value of Bitcoin more than halved and hit an all-time low Friday. However, it regained some momentum in the afternoon and hovered near $3,480.