Bitcoin, the world’s leading cryptocurrency asset, plunged below $23,000 a coin for the first time since December 2000 on Monday as global uncertainty amid rising interest rates continues to drag on the entire cryptocurrency market.
Bitcoin dropped to $22,600 a coin in the early hours of Monday to send the entire cryptocurrency space into a panic mood. This does not exclude ETH, the Ethereum token, as the second most dominant cryptocurrency depreciated in value to $1,220 a coin, down from $4,000 a coin it peaked in 2021.
Year to date, Bitcoin has now lost a combined 49.47% while in the last 12 months it has lost $46,389.21 of its value from $68,990.90 it peaked to $22,600 a coin it traded at 4 pm Nigerian time on Monday.
The market value of the cryptocurrency space also dipped below $1 trillion for the first since 2021, down from over $2.8 trillion it attained as early as November 2021. More cryptocurrency traders are now relinquishing their holdings to halt portfolio losses.
In fact, popular Bitcoin accumulator company, MicroStrategy (MSTR) is now sitting on over $1 billion in unrealised losses. The company began buying Bitcoin in 2020 at a price below $12,000 a coin. Over several months, the company accumulated 129,918 Bitcoin (BTC) worth $4 billion in value at the peak of cryptocurrency. Presently, the 129,918 BTC is valued at under $3 billion.
Also, Glauber Contessoto, the famous Dogecoin billionaire that invested $180,000 in Dogecoin when Billionaire Elon Musk was hyping the coin in 2021, just announced the coin was approaching his entry. In 2021, his Dogecoin holding was estimated at $3 million.
Contessoto via his official Twitter handle said it does not matter whether he cashed out or not but he managed to show people it was possible to become a cryptocurrency million.
I turned $180K into $3 Million. Whether or not I cashed out, I showed you it was possible. Pretty soon #Dogecoin could be back to where I bought it – this gives everyone a chance to do what I did. Don’t miss out on that opportunity.
— SlumDOGE Millionaire (@ProTheDoge) June 12, 2022
Despite encouraging people to see the crash as an entry opportunity. His Twitter followers continued to call him a paper millionaire because he did not cash out.
He responded with “Crypto. The good, the bad, the ugly. I’m fully committed to all of it. Whatever happens happens, I’m in it for the long haul.
“Just think where crypto will be in 5 years. Take a deep breath and invest in what makes sense to you – at the end of the day it’s your money and it does nothing when it sits in a bank.”
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.
Binance Partners TikTok Content Creator Khaby Lame to Drive Web3 Adoption
Binance has partnered with Khaby Lame, the most-followed creator on TikTok, to increase awareness of Web3. The influencer will act as a global brand ambassador for the exchange, by debunking myths surrounding the crypto and blockchain space.
The Italian Senegalese creator, Lame rose to fame on TikTok, gaining over 142 million followers with his videos calling out do-it-yourself content creators who make things too complicated. He provides comical life hacks that make things much simpler while doing his signature move where he puts both his palms up.
Lame with his signature style will create content that clears up misconceptions around Web3.
James Rothwell, Binance Global Vice President of Marketing said, “Khaby has become a cultural icon and one of the most entertaining creators globally. We love his charm and sense of humor, and think it will bring relevance and relatability as we scale Web3 adoption.”
“With so much nuance around Web3 and misinformation in the world, it was a perfect match to have Khaby on board to help debunk some of the myths around this space.” He added.
According to Lame, the partnership with Binance “aligns perfectly” with what he usually does, which is making complicated things easier and more fun. He said, “I consider my followers as my family, and I am always looking for new challenges and interesting content to share with them, I’ve been curious about Web3 for some time, and jumped at the chance to partner with a leader like Binance because it aligns perfectly with what I usually do: make complex stuff easy and fun for everyone!”
The TikTok star will also create an exclusive nonfungible token (NFT) collection with Binance, with the goal of enhancing engagement with his fans.
The onboarding of Lame into Binance follows the firm’s efforts to work with big celebrities. Last week, the exchange partnered with football star Cristiano Ronaldo to introduce his fans into the Web3 space through NFTs.
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.
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