Today, bitcoin holders are having a bad day as the iconic cryptocurrency slid nearly 5%. Bloomberg reports that the fall we have seen in the last 24 hours has brought Bitcoin (BTC) to its lowest level since July 2021. Furthermore, it reckons the downtrend will continue towards a crucial $30,000 make-or-break level, and cryptocurrency valuations generally show a "strong correlation with stocks."
Most would agree it is fair to characterize cryptocurrencies as volatile. Investing in these currency tokens secured by the blockchain has been a source of delight for those who got in early. However, the ups and downs in the last year or two have required a strong stomach.
As our headline says, the last time we saw BTC brushed with the $30,000 region was back in July 2021. However, it climbed to stratospheric highs in Nov 2021, cresting at nearly $69,000. If you look at today's valuation, which is oscillating around $33,000 at the time of writing, this represents a markdown of 30% on the best price in 2022 or a 50% reduction since the high of Nov 2021.
While Bloomberg compares the reduction in crypto valuations with the stock market, stocks have fared better in 2022, being just an average of 10% down. Meanwhile, gold, a popular commodity hold in times of turbulence, is up 2.5% this year.
In recent months there has been inflationary pressure seen in many parts of the world, primarily due to (but not limited to) energy prices and the Russian war in Ukraine. With worries about inflation and economic stagnation, some state banks have raised interest rates, encouraging people to save and prompting a global flight of capital from riskier investments. The greater risk or more speculative the investment, the harder it has been hit in recent weeks.
If you are interested in BTC as an investment, it is only natural to wonder about what will happen in the next few days and weeks. According to Bloomberg's chat with a crypto analyst, the current downtrend shows no sign of letting up. The $30,000 level was highlighted as a possible point of inflection. However, it would take a convincing bounce off that value to break out of the downtrend.
Where BTC leads, Ethereum (ETH) is sure to trend, and we note that this crypto with a special place in GPU-miners' hearts is also approx 5% down today at $2,385. Moreover, ETH's valuation is 34% down since the start of 2022 and 50% down from its all-time high in Nov 2021 ($4,865).
On the topic of speculative investments and blockchain technology, last week, we reported on the recent misfortunes experienced by NFT investors.
It's become another stock market asset for people to buy/sell, hasn't it?
Digital Beanie Babies... Backed by a physical Beanie Babies, but only 1 physical to every 100000 digital. That way you can have your NFT database entry for your digital Beanie Babies entries indexed to the 1 physical Beanie Baby.
At least when digital crypto is worthless it doesn't need to be recycled or pushed around in a wheel barrow to buy anything.
Oh wait... you could never buy anything with it directly anyway.