TL;DR Breakdown:
- Following Bitcoin’s spike to $39,000, over $2.9 billion worth of bitcoin has been moved from cryptocurrency exchanges.
- Jerome Powell, the chair of the Federal Reserve, emphasizes that monetary measures will be taken in March to avert potential inflation.
- Lily Zhang, the CFO of Huobi Group, says this isn’t your average winter.
Bitcoin, the most popular virtual currency, briefly dipped below $33,000. The crypto market lost almost $1.4 trillion in value. The leading cryptocurrency has since recovered to around $37,000. However, it has fallen by nearly 50% from its peak of $69,000 in November.
Fears of a “crypto winter” prompted traders to remove nearly $3 billion in value from different centralized exchanges.
Bitcoin Migration
The cryptocurrency market has been buffeted by more financial risks and government monetary policies that have exacerbated its decline. The situation could mean that investors will stop participating in the crypto market, especially young-market investors.
A few days before the market bottomed out, an unidentified whale purchased nearly 500 BTC during a downturn. The same investor is also retaining almost 125,000 BTC in a cold wallet.
While $2.9 billion in cryptocurrencies were moved from exchanges, there is still a significant amount of selling pressure on the market that aggressively pushes Bitcoin down. Bitcoin has been labeled a risk asset due to its influence on the sector’s performance in poor light.
According to Powell, the market may worsen in coming months due to rising prices in the United States. The president of the Federal Reserve said that the entity expects to tighten its grip on virtual currencies.
A different kind of a “crypto winter.”
The recent market crash is not the first or the worst. From its inception, the tale of Bitcoin has been one of the blood-curdling investors clinging on for dear life while riding the digital currency.
Many fortunes have been made, but many have also been lost, often within a few hours. Bitcoin has yet to overcome its propensity for dizzying highs and quaking lows more than ten years after it first came out from behind the web. Between December 2017 to December 2018, Bitcoin lost its value by 84%.
However, in an interview with CNBC, Lily Zhang, the CFO of Huobi Group, claims that this is not your typical winter. She specifies that more organizations have entered the cryptocurrency market. Also, since the market downturn, a more significant number of these institutional investors are buying at a bargain.
Finally, the wealthy have been searching for a chance to acquire Bitcoin, and the price decline gave them that opportunity. In conclusion, the market will bounce back to greater heights.
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