BENGALURU: At a time when the start-up ecosystem widely discusses funding winter, it looks like the cryptocurrency market, which has been hit the hardest on Monday, will face a prolonged crypto winter.
The most popular cryptocurrency Bitcoin tumbled below $23,000, an 18% drop in just 24 hours.
Also, this is the lowest in the past 18 months. The cryptocurrency market capitalisation too plunged below $1 trillion, the lowest since January 2021. Last year in November, the global cryptocurrency market peaked at above $2.9 trillion.
According to experts, this may fall further up to $20,000. “Crypto and Ethereum have seen multiple bear markets. It had crashed 80%, only to bounce back and find new highs,” said Vikram Subburaj, CEO, Giottus crypto platform.
These are trying and difficult times for investors as the crypto-space is being continuously impacted by inflation, high-interest rates, and a strengthening dollar (indicating a risk-off market), he added. In the past week, the bitcoin price dropped over 28%.
The second-largest cryptocurrency Ethereum prices too fell over 21% to $ 1,194 on Monday. “Crypto markets have seen a correction due to weak global cues. Internationally, stock and crypto markets have become highly correlated. The inflation rate globally has also been a major concern for investors,” said Rajagopal Menon, VP, WazirX.
The crypto Fear and Greed Index still showed a sentiment of ‘extreme fear’, this indicated that most investors were still extremely bearish. “While long-term investors will likely view this as an opportunity to buy the dip, retail investors may remain risk-averse in the current market,” said Darshan Bathija, CEO and co-founder of Vauld.