Tuesday, August 16

Widespread crash of bitcoin and other cryptocurrencies

Bitcoin is crashing along with other cryptocurrencies today, in another sign that risk aversion is increasing in financial markets.

The largest digital asset has fallen to $ 42,296 before moderating its decline. As of mid-morning on Saturday, it is trading at $ 47,600, a drop of about 11%.

Ether, the second-largest cryptoasset, fell as much as 17.4% before trimming the retracement to close to 10%. The global cryptocurrency sector has lost about a fifth of its value, falling to $ 2.2 trillion, according to tracker CoinGecko.

Cryptocurrency swings come amid a volatile period for financial markets. Rising inflation is forcing central banks to tighten their monetary policy, threatening to reduce the injection of liquidity that has boosted a wide range of assets.

The omicron variant of the coronavirus has also sparked risk aversion out of concern about what the global economic reopening could mean for the world. Global stocks are down more than 4% from the record reached in November, while safe haven assets such as Treasuries have risen.

Leveraged positions

Some leveraged bitcoin buyers have been pushed out of the market with today’s crash, according to Vijay Ayyar, head of Asia-Pacific with crypto exchange Luno in Singapore. “The markets have also been nervous with all the uncertainty surrounding the omicron, with cases that have appeared in many countries,” he explains. “It is difficult to say what that means for economies and markets and hence the uncertainty.”

About $ 2.4 billion of exposure to cryptocurrencies, both long and short, was liquidated on Saturday, the most since Sept. 7, according to data from Coinglass.com.

Bitcoin, famous for its volatility, has lost about $ 21,000 since hitting a record on November 10. But it’s still up more than 60% this year, a return that beats many other assets, and El Salvador’s President Nayib El Salvador’s President Nayib Bukele said the country had bought coins again. The nation this year adopted bitcin as legal tender. Something unprecedented.


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