The Comprehensive Market Review of Bitcoin and Ethereum
Bitcoin, the largest and oldest cryptocurrency, has climbed to unbelievable highs in recent years. In fact, the coin peaked at $68,000 just last year in Nov 2021. However, the roles have reversed since then, and BTC has been plummeting to record lows since the start of 2022.
But that's not it. Things haven't been going well, even for the second largest cryptocurrency that also happens to be the pioneer of smart contracts, the ETH. BTC alone has dropped by 70% to $20,000 this year, while Ethereum is hovering under $1000.
Since these two cryptocurrencies are industry giants, the other currencies tend to follow a similar pattern. Want to know more about how the plummeting prices of ETH and BTC impacted the overall industry?
Read along to find out!
BTC and ETH Price Drop At A Glance
As mentioned earlier, BTC reached an all-time high price of over $69,000 in 2021. However, the largest cryptocurrency plummeted even lower than $20,000 in June 2022 ($17600, to be precise)
Furthermore, the famous token, Ether, was trading above $10,000. However, it also dipped below $1000 in June 2022.
Currently, BTC is hovering around $22,000, and it's still trading at a low price. The most prominent reason to explain this behavior is the rising inflation and the fear among investors selling their crypto assets fast.
In contrast, ETH is currently trading at over $1500. Although the ETH price is still lower than the optimum value, it's anticipated that the ETH token will rise after the release of its new upgrade, i.e., the merge.
Impact Of The Drops Of Bitcoin And Ethereum On The Market
The market price drop of ETH and BTC has created a ripple effect across the entire industry. As a matter of fact, other cryptocurrencies, including Solana, Binance Coin, Terra, Luna, and Cardano, have also taken a massive blow following the unprecedented price drop of ETH and BTC.
As a result, the bitter clouds of uncertainty in the crypto industry have caused crypto-related companies, projects, and exchanges to make unwanted decisions.
For example, the famous Crypto lending platform Celcius announced a freeze in withdrawals and transfers between accounts to stabilize the extreme market conditions. Similarly, Blockfi, another lending platform, slashed its workforce by 20%, followed by Crypto.com and Gemini.
Moreover, the consistent downturn in the BTC's price and the unwarranted actions of crypto exchanges have shaken the investors' confidence. Most of investors are selling off their crypto assets in fear of further price drops.
For instance, Binance, one of the biggest crypto exchange markets, temporarily ceased Bitcoin withdrawal in June 2022 due to a backlog, ultimately leading to huge drops in various cryptocurrencies.
As a result of these dramatic shifts, the global crypto market collapsed below $1 trillion for the first time in 2022 since early 2021, as per CoinMarketCap.
But what plausible reasons led to the worst drop in the crypto space? Are you eager to learn about them? Here are several brief notable factors that contribute to the price drops:
The soaring global inflation.
As per Glase's insight, the abrupt actions by panicked short-term investors to dump crypto assets impacted the overall market.
The tightening monetary policy update by the Federal Reserve System.
China's government's recent announcement regarding the crackdown against cryptocurrencies has caused the prices to fall.
If you are a crypto investor, it must be clear by now that you cannot ignore the volatility factor. Conclusively, the price drops of BTC and ETH have caused a domino effect in the entire crypto space.
However, it's expected that the currencies will rise after inflation stabilization. What's more? The future updates in ETH and Blockchain networks may likely draw investors and cause the price to recover.
Having said that, it is recommended that you must do your due diligence and conduct research before investing in the market. In case you're looking for future updates and ongoing news in the crypto space, make sure to check out the Web Hooters blog.
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