The world’s most successful cryptocurrency, according to Coin Metrics, plummeted by 30 percent on Wednesday morning to just above $30.000. The price is slowly regaining momentum towards the $40,000 mark. Similarly, data from Cryptoquant shows that 17 Billion Bitcoin longs have been liquidated so far today..
Bitcoin Dumps on Attack
In less than 24 hours, crypto-market capitalization has fallen to 1.6 trillion dollars at press time from above $2 trillion. The market cap is the lowest since 26 April, and there is a concern that more declines could spell the end of the bull market in 2021
The huge liquidation of Elon Musk’s social media cryptos, who seemingly made the entire shift in his pro-Bitcoin stance, triggered increased selling pressure.
Elon Musk vs The Crypto Market
On 12 May, Musk reported that Tesla had ceased purchasing cars using bitcoin, citing environmental issues about the mining process. Then the entire crypto market was washed away on the same day by $300 billion.
But in a tweet today, Musk told Tesla that the EV manufacturer would not sell its $1.5 billion Bitcoin investment via a mixture of text and emojis.
Tesla itself is part of a wider technology range, which is currently down approximately four percent. Another corporation that owns a significant amount of Bitcoin for its company treasury, Microstrategy, is down by over 9 percent.
The billionaire businessman has recently faced more and more reproaches about his excessive pumping of Dogecoin markets and the latest claim to go “all-in to DOGE.”
Panic Selling Across the Crypto Market
As always, the rest of the crypto market has followed. Many major coins have lost double-digit percentages on the day. At a fall of nearly 12 percent, Ethereum is around 3,400 dollars while Binance Coin (BNB) fell from 10 to 525 dollars.
Double-digit losses were all suffered by XRP, Polkadot, Bitcoin Cash, Litecoin, Uniswap, Chainlink, and Stellar as panic selling accelerated.
China’s Tuesday announcement banning the provision of cryptocurrency-related services by financial institutions and payment firms also exacerbated the selling. Investors were warned against speculative crypto-trading by China, too.
Analysts at JPMorgan said investors could also be leaving bitcoin for gold, quoting the positioning data compiled based on the open interest in futures contracts for CME bitcoin. That demonstrates “the steepest and more sustained liquidation” since last October in bitcoin’s future. They told clients that it indicates that institutional investors continue to restrict them.
When inflation expectations are rising, the crypto asset selloff damages the concept of the asset class as an inflation hedge. More conventional hedges instead have taken hold, with gold this month has grown by almost six percent.
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