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Bitcoin loses more than 50% of its value since hitting record high in November

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A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken January 8, 2021. — Reuters/File
A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken January 8, 2021. — Reuters/File
  • Bitcoin sheds 7.2% today dropping to a low of $34,042.78.
  • Decline of Bitcoin wipes out more than $600bn in market value.
  • Other digital assets also record losses, with Ethereum down by 12%.

Bitcoin, the world’s biggest and best-known cryptocurrency, has shed more than 50% from its record high in November, adding further momentum to the meltdown in cryptocurrencies, Bloomberg reported.

Alpha Impact in Singapore CEO Hayden Hughes said: “Margin positions being liquidated caused a wave of additional sell pressure, as assets that had been held as collateral were forcibly sold to pay for margin loans.”

According to Coinbase, Bitcoin shed 7.2% today dropping to a low of $34,042.78 before paring most of those losses.

Meanwhile, other digital assets also recorded losses, with Ethereum down by 12%. Solana and Cardano each fell at least 17%.

The decline of world’s biggest cryptocurrency has wiped out more than $600 billion in market value and over $1 trillion from the aggregate crypto market.

Citing Bespoke Investment Group, the media outlet reported that while there have been much larger percentage drawdowns for both Bitcoin and the aggregate market, “this marks the second-largest ever decline in dollar terms for both”.

“I would expect it to take some time for a bottom to form and for confidence to return, before expecting any sort of bullishness,” Hughes said.

It is pertinent to mention here that a dominant theme has emerged in the digital-asset space with the US Federal Reserve’s intentions on reining in inflation rocking both cryptocurrencies and stocks.

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Media reports suggest US President Joe Biden’s administration is planning to release an initial government-wide strategy for digital assets as soon as next month and will ask federal agencies to assess the risks and opportunities they pose.

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