URGENT UPDATE: Bitcoin has crashed below $90,000 for the first time in seven months, signaling a severe downturn in investor confidence. The cryptocurrency has lost nearly 30% of its value since peaking at over $126,000 in October, raising alarm across the financial markets.
As of Tuesday, Bitcoin was trading at $92,891 after dipping as low as $89,286.75. This decline has contributed to an astonishing $1.2 trillion loss in the total cryptocurrency market over the past six weeks, according to data from CoinGecko.
Market analysts attribute this selloff to a combination of fears surrounding future U.S. interest rate cuts and a broader risk-averse sentiment that has taken hold following an extended market rally. Joshua Chu, co-chair of the Hong Kong Web3 Association, stated,
“The cascading selloff is amplified by listed companies and institutions exiting their positions…confidence can erode with remarkable speed.”
Corporate crypto holders are facing significant potential losses as sentiment weakens. Speculators who previously invested in hopes of gaining from favorable U.S. regulations are now pulling back, leading to consistent outflows from exchange-traded funds (ETFs) in recent weeks. Joseph Edwards from Enigma Securities noted,
“The sell pressure here isn’t extraordinary, but it’s coming at a relative weak point on the buy side.”
In addition, companies heavily invested in cryptocurrencies, including major players like Coinbase and miners such as Riot Platforms, have also seen their stock values decline amid the downturn. Standard Chartered Bank has warned that Bitcoin dipping below $90,000 could leave many corporate bitcoin holdings “underwater.” Currently, listed companies hold about 4% of all Bitcoin in circulation, with 3.1% of all Ether.
Amid this turmoil, the biggest corporate holder of Bitcoin, Strategy, has been actively adding to its stockpile. Founder Michael Saylor announced the acquisition of 8,178 bitcoins on Monday, bringing their total holdings to 649,870 tokens at an average price of approximately $74,433 per bitcoin.
Moreover, Ethereum has not escaped the downturn, losing nearly 40% of its value since reaching a peak above $4,955 in August. Matthew Dibb, chief investment officer at Astronaut Capital, commented on the prevailing mood, stating,
“All in all, sentiment is pretty low in crypto and has been since the leverage wipeout of October.”
As this situation develops, the immediate future for Bitcoin and the broader cryptocurrency market remains uncertain. Investors and stakeholders are advised to monitor the evolving landscape closely, as further volatility could be on the horizon.
