Bitcoin and other cryptocurrencies fell on Sunday, as losses in the asset class piled up over the weekend after US data showed persistent inflationary pressures in May, marking the fastest pace of increase since December 1981.
Bitcoin is down about 3% to $27,530, and Ethereum is down 2.5% to around $1,484, while bigger losses are seen for meme coins like Dogecoin. About 5%, at the latest point on Sunday afternoon, according to data from Coingecko.
Cryptocurrencies are following Wall Street losses after data on Friday showed that US inflation rose 1% in May, well above the 0.7% monthly rise that economists had expected. The annual rate rose 8.6 percent, surpassing the highest level of 8.5 percent in March 40 years ago. The Dow Jones Industrial Average DJIA, -2.73%, S&P 500 SPX, -2.91%, Nasdaq Composite, -3.52% posted their biggest weekly losses since January. The Dow Jones Industrial Average fell 880 points on Friday.
Investors fear that inflationary pressures could lead to more aggressive action from the Federal Reserve, which holds its two-day policy meeting on Tuesday with a planned half-percentage point hike in the federal funds rate. At the end of the meeting on Wednesday. This key rate is currently in the 0.75% to 1% range.
Stock losses swept away assets seen as riskier, with cryptocurrencies also falling on Friday. Since the price of bitcoin on Sunday topped just over $27,000, the price of bitcoin has fallen nearly 60% from its high in November 2021. #Cryptocrash and #bitcoincrash have been trending on Twitter over the weekend.
“From the perspective of the next cycle, we may be close to the bottom, but that does not mean that the price can reach 50% more.Bobby Ong, co-founder and COO of crypto-price tracking firm CoinGecko, Bobby Ong, wrote in a Twitter thread on Sunday.
1 / Some statistics about previous market cycles:
BTC: $1127 -> $200 (-82%)
BTC: $19,423 -> $3,217 (-83%)
Ethereum: $1,448 -> $85 (-94%)
BTC: $67,167 -> $27682 (-59%)
ETH: $4,815 -> $1,466 (-69%)
Make whatever you want with the information above.
—Bobby Ong June 12 2022
“FWIW, I don’t think we’re at the bottom of the hole yet because conferences are still full, crypto parties are still expensive, we continue to see cross-overs between teams, and the macro environment is still poor. The layoffs have begun but they have not spread yet. Stay strong and manage your positions wellHe said via Twitter.
Amidst the plunge in cryptocurrency prices this year, some exchanges including Coinbase have suspended hiring or announced layoffs, with cryptocurrency exchange Gemini recently announcing that 10% of jobs will be cut.
Cryptocurrency prices may drop quite a bit, according to some industry watchers. However, some advocates of digital assets argue that the current downturn could also be synonymous with potential opportunities:
The cryptocurrency is already oversold and devalued at these prices.
Not that we can’t go down any further (we certainly can and probably will) — but there are actually life-changing opportunities on the table for those willing to buy and hold for the long-term.
—John ShapeShift (@ShapeShiftCOO) June 12 2022
Other crypto-watchers have argued that the crash could serve as a reminder of the benefits of diversification:
This kind of variety looks really nice during # encrypt Alcohol market.
– Lark Davis (@TheCryptoLark) June 12 2022
However, for some, the message is frankly that investors are wary of future losses for a wide range of asset classes:
⚠️ Cryptocurrencies and stocks are screaming loudly, this party has ended well and truly, but not everyone wants to accept it just yet. If you don’t want to listen, find out the hard way.
– Marc-Andre Fongern (@Fongern_FX) June 12 2022