The price of Bitcoin (BTC) is attempting to recover today after plummeting below $30,000 on Monday, hitting a low of 12%.
The world’s largest cryptocurrency is presently trading at roughly $31,500 at 6:00 a.m. EST (1000 GMT).
Bitcoin hadn’t traded below $30,000 since July 2021, when it went as low as $29,839. The most recent dip coincides with a broader decline in the value of cryptocurrency and stock markets.
According to the blockchain data platform Glassnode, over 40% of Bitcoin owners are losing money on their investments. Moreover, according to last month’s figures, 15.5 percent of all Bitcoin wallets experienced an unforeseen crushing loss when Bitcoin plummeted below $31,000. As a result, Bitcoin’s strong ties to technology companies and the Nasdaq cast doubt on assertions that it acts as an inflation hedge.
Furthermore, during the most recent sell-off, Glassnode data reveals an increase in “urgent transactions.” To put it another way, investors paid higher costs to minimize transaction times. Therefore, the total value of all on-chain transaction costs paid reached 3.07 Bitcoin in the past week.
According to Glassnode experts, “the dominance of on-chain transaction fees connected with exchange deposits also signalled urgency.”
Furthermore, the decrement from yesterday was worsened by the fall of the stablecoin TerraUSD. The fourth-largest stablecoin fell 40%, breaking its 1:1 peg to the US dollar.
Stablecoins are digital tokens whose value is linked to that of traditional currencies. Stablecoins are popular safe-haven bets among investors, and they serve as a means of exchange, allowing traders to move funds around and wager on other crypto assets.
Unlike other stablecoins with traditional currency reserves, TerraUSD maintains its peg to the dollar using an algorithm that moderates supply and demand through a long and complicated process involving another token, Luna.
The overall market capitalization of Bitcoin is presently at $1.43 trillion, down more than half from its all-time peak in November.