Categories Technology, U.S. Markets News

Investor caution mounts as crypto market braces for a long lull

After so many ‘up and down’ cycles, cryptocurrencies now follow a clear pattern when they enter the bear market. While seasoned investors shrug off the latest correction saying it is normal, the scale and frequency of the recent crashes call for a closer scrutiny.

The case of Bitcoin, the perennially dominant crypto derivative, explains the current trend and the direction in which the market is moving. Bitcoin plunged more than 10% Friday and hit a 15-month low, continuing the downtrend that started earlier this year.  Having lost about three-fourths of its value this year alone – registering the most pronounced depletion this week – Bitcoin is unlikely to rebound as quickly as it did in the past.

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.

Crypto losses hit $700 billion as Bitcoin sees worst week

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.

 

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

United Parcel Service (UPS) seems on track to regain lost strength

Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic

IPO Alert: What to look for when Boundless Bio goes public

Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.

Nike (NKE) bets on innovation and partnerships to return to high growth

Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top