Over the past four weeks, Bitcoin lost 11.91%, although its price has risen by 76.19% over the past year, according to Trading Economics. Photo: Reuters
Nicola Mawson
Bitcoin lost more than 17% yesterday, to trade at a five-month low in response to market moves in developed economies amid fears of a possible US recession and ongoing geopolitical tensions.
Christo de Wit, Luno country manager, said investors were leaving riskier assets in the wake of severe deterioration in the markets.
Binance’s information yesterday showed that Bitcoin lost 17.6% of its value during the day over the previous trading session. Over the past four weeks, Bitcoin lost 11.91%, although its price had risen by 76.19% over the past year, according to Trading Economics.
The Spectator Index posted on X.com that more than $1 billion (R18.6bn) had been liquidated from crypto market over the past 24 hours as of 9am yesterday.
According to Trading Economics global macro models projections and analysts’ expectations, the virtual currency’s value is anticipated to continue to decline, dropping from Monday’s value of $51045 to $50929 by the end of this quarter and $45157 in a year’s time.
Ben Walther, the founder of Crypto OS, explained that the crash was a “combination of several that have converged to create what could be described as the perfect storm”.
He said, among the main drivers, were fears of a recession in the US and a potential decline in global growth. “Economic indicators are flashing warning signs.”
Other issues Walther pointed to include the increasing likelihood that Donald Trump – who is pro virtual currencies – will not win his bid to be the next US President in November, the unwinding of the Japanese Yen as rising interest rates causing pressure on those who used the currency to fund investments at little cost, as well as increasing geopolitical tensions in the Middle East and the ongoing war in Gaza.
“The market is reacting to a complex mix of pressures, and as always, volatility remains a hallmark of the crypto space,” said Walther.
Bitcoin, created in 2009 by a person or group using the pseudonym Satoshi Nakamoto, is highly volatile because of the tight market, which is not as liquid as traditional trading instruments such as shares, Binance explained. Moreover, it is subject to speculation, which can lead to wild swings.
Price information from Binance shows that the volatile virtual currency reached an all-time high price of $75 830 on March 14, 2024. The all-time low price of Bitcoin was $0.04865, which was recorded on July 10, 2010, it states on its website.
BUSINESS REPORT