The cryptocurrency market posted stunning losses on Tuesday as a sell-off sent the prices of nearly every single coin soaring — undoing gains priced in by the retail trading frenzy ahead of El Salvador’s first day of accepting bitcoin as legal tender.
The value of the world’s cryptocurrencies plunged to a low of about $1.9 trillion by 11:15 a.m. ET Tuesday, nearly 15% less than 24 hours and reflecting a loss of more than $410 billion, according to crypto data site CoinMarketCap. .
With market cap losses surging, bitcoin fell 15% to below $43,000 — its lowest price in nearly three weeks — before quickly paring some losses and stabilizing at around $46,810 by 11:50 AM ET, and neither Still 9% lower than a day ago.
Meanwhile, ether, binance, and Cardano fell between 13% and 18% per coin, while Solana was the only token to report an increase in value, up 8% after a staggering 36% rise over the week. the past.
In the middle of a sudden meltdown, Salvadoran President Nepe Bukele announce The country took advantage of the price collapse to purchase an additional 150 bitcoins, increasing its holdings to 550 total coins, worth about $25 million.
Sentiment began to dent early Tuesday as El Salvador’s wallet ran into technical difficulties within hours of its debut, forcing President Bukele to do so. announce It will be temporarily offline.
The high trading volume has fueled speculation about institutions selling large stakes, and even caused brief outages and delays in trading on several of the world’s largest cryptocurrency exchanges, including Coinbase, Kraken and Gemini.
The massive sell-off came less than a day after JPMorgan analysts warned in a note to clients that the recent surge in altcoins — or cryptocurrency alternatives to bitcoin and ether — reflected “retail investor mania and foam,” in contrast to sustained market gains. “The August surge in non-fungible tokens and a boom in decentralized finance activity has helped not only Ethereum but also alternative cryptocurrencies that facilitate or plan to facilitate smart contracts, such as Solana, Binance Coin, and Cardano,” said Nikolaos Panigerzoglu, managing director of JPMorgan. “. Monday. “The previous phase of retail mania in the cryptocurrency markets was between the beginning of January and the middle of May… and retail investors made the cryptocurrency markets look frothy again.” After bouts of retail investing mania in January and May, the cryptocurrency markets collapsed by about 13% and 50%, respectively.
El Salvador made history on Tuesday by becoming the first sovereign government to use bitcoin as a legal currency — paving the way for residents to pay taxes and other debts in cryptocurrency, and allowing hundreds of thousands of businesses across the country to accept it as payment. In addition to its bitcoin buying spree, the Central American country has already marked the occasion with the launch of hundreds of bitcoin ATMs and the emergence of a new cryptocurrency wallet, Chivo, backed in part by California-based BitGo. Ahead of the raucous event, billionaire bitcoin bull Michael Saylor, CEO of business analytics firm MicroStrategy, rallied around retail investors on Twitter and encouraged them to buy $30 worth of bitcoin to show support for El Salvador’s historic achievement.
“Bitcoin is lower at ‘buy before the big event, sell’ the truth is reacting to El Salvador’s historic moment in the cryptocurrency embrace,” Ed Moya, senior market analyst at Oanda, said in an email on Tuesday, adding: “Bitcoin fundamentals remain as It is, as prices set a new trading range between the $46,000 and $53,000 levels.
El Salvador embarks on a $21 million crypto buying spree as Bitcoin becomes legal tender (Forbes)
Solana leads massive rally of cryptocurrency and bitcoin as JPMorgan warns crypto markets are looking forward again (Forbes)