Bitcoin Plunges $100 Billion In One Day–Here's How Long The 'Bloodbath' Could Last – Forbes
Bitcoin Plunges $100 Billion In One Day–Here’s How Long The ‘Bloodbath’ Could Last – Forbes
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Despite still-booming institutional adoption, the price of the world’s largest cryptocurrency is tanking Thursday morning as analysts warn of massive volatility on the horizon, pushing bitcoin’s losses to nearly 15% since an all-time high earlier this month. Bitcoin prices, however, are still up nearly 700% over the past year. Getty Images Key Facts
As of 11 a.m. EDT, the price of bitcoin has tanked 9.4% over the past 24 hours, pushing its market capitalization down to about $970 billion, from nearly $1.1 trillion at the same time Wednesday, according to crypto-data website CoinMarketCap .
Analysts are pinning the losses to nearly $6 billion of bitcoin options set to expire Friday, effectively forcing investors to either double-down on risky bets or unwind their positions—the perfect recipe for volatility.
Megan Kaspar, a managing director at crypto investment firm Magnetic, said Thursday morning “the bloodbath will continue” as the options expire, but that prices won’t dip below $49,000–roughly 5% below current prices of about $51,880.
Ether, the world’s second-largest token with a market cap of about $185 billion, is also plunging as a result of another swath of options expiring, falling 7% over the past 24 hours.
The steep plunge comes less than one day after $2 trillion investment powerhouse Amundi, Europe’s largest asset manager, reportedly warned of a possibly “brutal” correction in a note to clients, saying that cryptocurrencies “have no real economic underlying asset,” and have yet to prove themselves as a reliable store of value or a universal means of payment. Key Background
Bitcoin prices have skyrocketed over the past year amid booming institutional adoption and inflation fears sparked by massive government spending to combat the pandemic. Fidelity Investments on Wednesday filed an application for its first bitcoin exchange-traded fund—about one month after North America’s first two bitcoin ETFs debuted on the Toronto Stock Exchange. Though the United States has yet to approve a bitcoin ETF, there are other recent signs of legacy financial institutions warming up to bitcoin. Just last week, Morgan Stanley said it would open up bitcoin exposure to its wealthy clients, but it’s limiting such funds to investors with “an aggressive risk tolerance.” Tangent
Bitcoin’s price surged Wednesday after billionaire Elon Musk tweeted that the cryptocurrency could now be used to purchase Tesla vehicles. Surprising Fact
Bitcoin prices are still up a staggering 680% over the past year, hitting a latest high above $61,000 on March 13. Further Reading