The crypto bubble that inflated Bitcoin’s value past $1 trillion and added billions to nonsense digital tokens overnight is bursting.
Bitcoin plunged almost 22% to $35,000, wiping out more than $500 billion in value from the coin’s peak market value. It has erased all the gains it clocked up following Tesla Inc.’s Feb. 8 announcement that it would use corporate cash to buy the asset and accept it as a form of payment for its vehicles. Ethereum, the second-biggest coin, sank more than 40%, while joke token Dogecoin lost 45%.
Bitcoin is now down more than 50% from its record of almost $65,000 set in April. Fueling the volatility is Tesla CEO Elon Musk, whose social-media utterances have whipsawed the crypto community. A statement from the People’s Bank of China on Tuesday reiterating that digital tokens can’t be used as a form of payment added to the selloff.
The selloff dominated market chatter on a day when equities also were tumbling; and the Federal Reserve was set to release minutes from its latest meeting. #Cryptotrading was trending on Twitter, where critics and fans alike were in a tither over the rout. Critics had warned for weeks; that the moves in crypto assets were unsustainable and that any sign of a selloff would lead to a rout.
“This is going to be the first ‘welcome to crypto’ day for a lot of new entrants,” ;said Stephane Ouellette, chief executive and co-founder of FRNT Financial. “The history of these assets has been littered with aggressive rallies and sickening selloffs.”
Crypto critics had warned for weeks that the moves in crypto assets were unsustainable and that any sign of a selloff would lead to a rout
Law Student, School of Law, Quaid-I-Azam University, Islamabad