Global cryptocurrency market has suffered its worst crash of this year. The total cryptocurrency market cap has fallen below the $1 trillion mark. The price of top cryptocurrency Bitcoin (BTC) has also tumbled, falling as low as $21,033 in a massive crash triggered by multiple fears.
The crypto market cap had touched the $3 trillion mark for the first time in November last year which was mainly led by Bitcoin as it touched an all-time high of $69000.
However, currently the global crypto and financial markets are battered by rising inflation and growing geopolitical uncertainties. The high inflation rate in some of the most powerful economies of the world has kept the investors on their toes as the crypto market has been dominated by sellers for quite some time now.
At the time of writing, BTC price was up by around 10 percent to $22,974. It is still 10 percent down compared to its price 24 hours back.
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As extreme fear persists in the crypto markets due to regulatory uncertainties, heightened inflation and volatility, experts think Bitcoin may fall up to $20,000 in the current sell-off.
“Bitcoin dipped to its lowest since December 2020 on Monday as the market continued to plunge with an increase in selling price over the weekend, following the rise of inflation in the U,S. BTC is down by more than 49% since the beginning of the year and 66% from its all-time high at US$68,990 in 2021. If sellers are determined, BTC can also fall to US$20,000,” Edul Patel, CEO and Co-founder of crypto investment platform Mudrex said.
Khaleelulla Baig, co-founder and CEO of Koinbasket, also thinks that the BTC price may fall up to $20,000. However, he thinks this is also a good opportunity for investors interested in buying the top crypto at a discount.
“There are chances that BTC may further fall up to $20,000. Nevertheless, at current prices, it’s a great entry opportunity for long-term investors. They may look at entering in 3-5 tranches over the next 2 quarters.” Said Baig.
Experts say that under current market conditions, investors should exercise caution and should not invest much in cryptos.
“The current market conditions call for caution and investors should execute their investment strategy depending on their risk appetite. The rising pricing is a matter of concern for the financial markets and respite will come with inflation cooling down to an acceptable level,” Charles Tan, Chief Marketing Officer, Atato, a licensed MPC crypto custodian wallet, said.
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Baig said that cryptocurrencies are here to stay as they have proven their mettle time and again, despite numerous crackdowns, bans and tighter regulations over the last decade. However, regardless of high potential returns, cryptocurrencies are highly volatile and risky asset classes. Hence, investors shouldn’t allocate more than 5-10% of their savings into the same.
(Cryptocurrencies, including Bitcoin, and other virtual digital assets are unregulated in India. They are considered extremely risky for investment. Please consult your financial advisor before making any investment decision)