With longest drop in 8 years, bitcoin drops to lowest since 2021

With longest drop in 8 years, bitcoin drops to lowest since 2021

Measures by the US central bank to contain inflation generate flight of risk assets and main cryptocurrencies continue to fall sharply

Just like traditional markets, the cryptocurrency market continues to suffer from the impact of the super Wednesday. The event, which announced the increase in interest rates in the United States last week, was responsible for shaking the global economy, especially when it comes to risky assets.

When the US central bank raises interest rates, it also increases the cost for financial institutions to borrow, causing a ripple effect that extends to the credit card rates of ordinary consumers. The intent of measures like this is to slow or reverse inflation, making money more expensive.

Despite initially providing a bullish move in major cryptocurrencies, it didn’t take long for the half-percentage-point increase to take a toll on the crypto market, which is already grieving the loss of more than $300 billion in capitalization.

On Thursday, the 5th, the vast majority of cryptocurrencies plummeted. Overall, only stablecoins – stable cryptocurrencies whose value tracks real assets like the dollar – have held firm to the somewhat delayed reaction from the industry after Super Wednesday.

The downward movement continued to intensify over the weekend, and came to make the world’s largest cryptocurrency, bitcoin, reach this Monday, 9, its lowest value since last year’s losses, when it reached be quoted at US$ 29 thousand.

Bitcoin starts its seventh straight week in the red, something that hasn’t happened in eight years, according to information from CryptoPotato. According to glassnode, the number of portfolios at loss is the highest in the last two years. The record inflation generated by the coronavirus pandemic caused a movement of risk assets to flee, which have not performed well since the beginning of the year. At press time, the cryptocurrency is trading at $32,845, down 5.2% in the last 24 hours, according to CoinGecko.

Ether, the native cryptocurrency of the Ethereum network, continues to accompany bitcoin. Despite showing a drop of 6.2% in the last 24 hours and being quoted at $ 2,394 at the moment, these numbers can sound even more worrying if compared to the cryptocurrency’s all-time high. Since hitting $4,878 in 2021, ether has dropped more than 50%.

However, losses can be even greater for cryptocurrencies that do not rank at the top of the cap ranking. Algorand, shiba inu and polkadot lead in losses this Monday, 9, with approximately 10% drop. Another negative highlight is the LUNA cryptocurrency, which stars the Terra blockchain together with the UST stablecoin. As the stable cryptocurrency loses its parity with the dollar, LUNA has dropped by almost 30% in the last 7 days, after having broken record after record in its price at the beginning of the year.

Source: Exam

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