Bitcoin, the world’s most popular cryptocurrency, on Monday slightly crossed over the $30,000 a coin resistance despite cryptocurrency space remaining largely flat since the Luna coin catastrophe.
A check by Investors King revealed that Bitcoin, Ethereum and other leading cryptocurrencies improved a little compared to last week.
In the last 24 hours, the world’s most dominant cryptocurrency asset has risen by 1.02% to $30,275.28 a coin. While in the last seven days the leading digital asset has gained 2.33% with its total market value improving to $575.085 billion. Investors transacted 875,447 bitcoins valued at $26.432 billion in the last 24 hours.
In the same vein, the second most capitalised cryptocurrency, ETH, the token of the Ethereum blockchain, appreciated by 1.90% to $2,054.97 per coin in the last 24 hours and 2.48% in the last seven days. Investors had transacted 6,782,909 ETH estimated at $13.902 billion in the last 24 hours to push ETH market capitalisation to $247.783 billion.
Tether (USDT), the world’s leading stablecoin, gained 0.02% in the last 24 hours to $0.9991. USDT market value also grew to $73.204 billion while investors exchanged 52,015,694,499 USDT worth $51.968 billion in the last 24 hours.
However, BNB, the token of Binance, the world’s leading cryptocurrency exchange platform, appreciated the most. Posting 5.47% in the last 24 hours and 12.48% in seven days. The CEO of the company CZ had said he only invested in tokens with a use case like Bitcoin and BNB.
Over the years, he has warned people against investing in tokens without a use case and recently he has upped his warning, especially after the Luna coin plunged from $119 a coin to $0.00013 in a week.
“Even though BTC gained nearly 4 percent growth in the past 24 hours, it could not break the US$30,000 level. If BTC can break its initial resistance level at US$31,000 and US$32,000 this week, we may see an upward trend”, Edul Patel, the CEO and Co-founder of Mudrex stated on Sunday before Bitcoin extended its gain above the $30,000 level.
The Media Hasn’t Been Entirely Fair to Bukele’s Bitcoin Gambit
Most members of the media have considered the negative components of President Nayib Bukele’s Bitcoin Gambit in El Salvador. It is true that the value of Bitcoin has tumbled since the president first bet big on the cryptocurrency. It is true that the IMF and lenders look at the country’s economic policy with extreme distrust, and agencies have dropped the country’s credit rating. It is true that the country has over a billion dollars in debt payments due over the next twelve months. If you look at how things have played out this far, you could say that it hasn’t quite gone as Bukele has hoped. In fact, many have said that.
But, let’s be pragmatic. Estimates show that the country has spent $374 on the Bitcoin gambit, in totality. A $50 million unrealized loss on Bitcoin holdings, in a country with a $29 billion economy, is less than a half percent of the national budget. But that unrealized loss is unrealized for a reason. President Bukele is doubling down on Bitcoin. He’s even bought the dip. He understands that this drawback is due to macroeconomic conditions, not the least of which being staggering inflation due to massive pandemic-related spending packages. Then, there’s an unpredictable war in Eastern Europe, not to mention the ongoing supply chain issues, still lingering from Covid shutdowns.
Those things have rained hellfire onto the digital assets space, but so, too, have they affected the traditional markets. The Dow Jones lost 1100 points in a single day of trading last month. Bukele knows that Bitcoin will bounce back. His investment in Bitcoin is one which is long-term. That said, he’s up for re-election in 2024 and continues to boast high approval ratings, thanks, in part, to his tough-on-crime stances.
The truth is that the economy in El Salvador has long been plagued by unfavorable conditions. The country has long paid a premium for its debt. In the country’s most recent credit downgrade, Fitch maligned the country’s “uncertain access to multilateral funding and external market financing given high borrowing costs,” in addition to its “limited scope for additional local market financing.”
But, let’s consider that. El Salvador has long had precious few major opportunities. Through the Bukele’s Bitcoin Gambit, the country has re-emerged on the global scene. While the move to Bitcoin was aimed at bringing the majority unbanked population into the modern financial scene, that takes time and consumer education. What the country has seen, immediately, is external interest. That, in and of itself, is significant, considering that, not long ago, El Salvador was more dangerous than Afghanistan.
Gambit — a term that many may only be familiar with from the recent Netflix hit, The Queen’s Gambit. But the definition, in part, says: an “opening remark, typically one entailing a degree of risk, that is calculated to gain an advantage.” Bukele put his country on the map again. Sure, there are real risks. Significant risks. It may well be the final nail in the country’s bid for a billion-plus dollar loan from the IMF. However, he has propelled El Salvador into the spotlight, creating a culture of innovation which is tech friendly and forward focused. Unfortunately, Bukele’s gambit launched right before a massive downturn in the markets, driven by investor fear. However, the cause doesn’t matter. Whether Bukele will be regarded as a forward-thinking leader is entirely dependent on Bitcoin’s turnaround.
There’s little doubt that Bitcoin will, indeed, turn around. But, timing is everything. Until then, there’s much to be said for the tourism boost that the tiny Central American country has received. Tourism is up 30% since Bitcoin became legal tender. The administration has planned a Bitcoin City, complete with mining powered by a volcano. Granted, the project is on hold due to market conditions, but El Salvador has a number of irons in the fire that they didn’t have three years ago.
In their cryptocurrency wallet rollout, only 20% of users continued to use the wallet after they spent their $30 in Bitcoin given to them by the government, but many argue that was due in large part to a poor user experience within the wallet. There’s a great deal that the country must work on, even within the master Bitcoin plan. Beyond it, it must find a way to begin to balance their budgets and continue to lower crime rates. However, if Bitcoin bounces back, and if the country can bring in significant external investments, many may look back at this gambit in a positive light. There are many opportunities to exploit, once the market begins to correct. In addition to the tourism angle and the mining apparatus, if the country continues to work on its economic fundamentals and infrastructure, it could see interest as a jurisdiction which is friendly to fintech and other cutting-edge innovations.
Sure, there’s a lot of risk here. And President Bukele has suffered the consequences of pretty poor timing. However, the gambit isn’t over until his political shelf-life wears out. And, right now, it doesn’t appear that will be in the near-term.
80,000 Bitcoin Owners Lost Millionaire Status In 2022 Crypto Crash
Data from BitInfoCharts revealed that a total of 108,886 Bitcoin (BTC) addresses owned over $1 million worth of bitcoin during its all-time high of $68,789.63 on November 10, 2021. However, following the bearish market trend in the crypto space over 80,000 BTC addresses have lost their millionaire status with bitcoin hovering around $19,000.
The report revealed that only 26,284 BTC addresses hold over $1 million worth of bitcoin, this implies that the downward trend in the crypto market has significantly reduced the number of bitcoin millionaires by more than 75 percent in the last nine months.
The crypto bearish trend also saw the number of whales with more than $10 million worth of bitcoin decline from 10,587 BTC Addresses to 4,342 BTC Addresses.
Despite the decline in the net worth of former BTC millionaires, the bear market has seen more than 13,000 new “wholecoiners” — a wallet that contains one or more BTC — added to the market, bringing the total number of wholecoiners to just over 860,000. This significant spike in the number of whole coiners would suggest that retail investors are accumulating large amounts of BTC while prices tank.
Adding further credibility to the retail accumulation narrative, more than 250,000 addresses have added 0.1 BTC, or $2,000 or more to their holdings over the past 20 days, according to data from Glassnode.
Bitcoin and the rest of the digital asset market have been negatively impacted by a number of different issues, including increased regulatory scrutiny, sustained geopolitical unrest, rising inflation and interest rate hikes.
Due to the increasing uncertainty around the stability of global markets, commentators seem to agree that the price of risk assets like Bitcoin could continue to suffer over a longer time frame.
At the time of writing, Bitcoin is trading at $19,143.45 down 4.74 percent in the last 24 trading hours.
New Risk Concerns Drag on Bitcoin, Drops Below $30,000
On Wednesday, altcoins pared gains from the US holiday rally as South Korea reassesses its position on cryptocurrency following Do Kwon-led $60 billion decline in the market value of Luna.
Despite Bitcoin hitting $32,000 a coin, cryptocurrency traders are not convinced the world’s most dominant digital coin can sustain its positive trajectory. Therefore, investors started taking profit after Bitcoin hits the $32,000 per coin resistance level.
In the last 24 hours, Bitcoin has dropped 6% of its value, and presently trading at $29,900 a coin. As recently as Tuesday morning, Bitcoin was trading above $32,000 on reports that China has started relaxing some of her COVID-19 restrictions and the possibility of the US Federal Reserve easing it recently raised interest rates.
By early Wednesday, all of that good faith had vanished, with investors reverting to the risk aversion that had characterized their actions for much of the previous eight months. Ether, which was selling at around $1,800 at the time, was also down over 7%.
Other big cryptocurrencies plummeted even more, with Luna Classic (LUNC), the new moniker for the original LUNA on the Terra protocol, plummeting by 61 percent at one point. SOL and ADA both dropped by almost 12%, while DOT fell by about 9%.
Joe DiPasquale, CEO of crypto fund manager BitBull, stated to CoinDesk, “Bitcoin’s price behavior today is not wholly unanticipated.” “Not only has it been under pressure from traditional markets, but it has also been unable to break through the $31K-$32K resistance zone, resulting in a breakdown from the weekend’s range.”
As investors reinforced their concerns about high inflation and the possibility of a recession, major stock indexes fell, with the tech-heavy Nasdaq and S&P 500 each shedding 0.7 percent. The price of gold and the yield on the 10-year Treasury note both increased.
Jamie Dimon, the CEO of JPMorgan Chase and a crypto skeptic, warned investors and analysts at a business conference on Wednesday that the firm would be prudent with its balance sheet and prepare for tough economic times.
Dimon expressed concern about central bank quantitative tightening as well as the ongoing consequences of Russia’s invasion of Ukraine. “It’s kind of bright right now, things are OK, and everyone feels the [US Federal Reserve] can manage this,” Dimon added. “That hurricane is right down the road, heading straight for us.”
Despite outpacing altcoins, Bitcoin ended May in the red, despite being a historically good month. That indicated investors’ choice of the least risky digital asset. Nonetheless, DiPasquale of BitBull was pessimistic about Bitcoin’s ability to rapidly rise. “Any prospects of a speedy reversal will require strong purchasing activity and a major sentiment shift moving forward,” he wrote.
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