Here's why Bitcoin lost $1,000 in value in minutes! In a week that promised to be decisive for Bitcoin and risky markets, the mother of cryptocurrencies has apparently chosen its side. That of the bears. After the release of US inflation figures, Bitcoin and the crypto market is unscrewing. The asset just lost nearly 5% of its value and over $1,000 in just a few minutes. For the crypto market, the losses are in the billions.
Inflation sinks Bitcoin
While forecasts were for inflation at 8.1% over 12 rolling months, it is stronger than expected at 8.3%. If the decline is present for the second month in a row, the optimism on expectations has largely pushed Bitcoin down. Another element, inflation over 1 month posted an increase of 0.1% while the general consensus was expecting a drop of 0.1%. And it is perhaps on this variable that the shoe pinches.
What is called “core” inflation, that is to say without food or energy, rose by 0.6% in August, while the general consensus was counting on the same increase as in July (+0.3%).
Over a rolling 12-month period, “core” inflation is 6.3%. The players in the financial world were counting here again on more optimistic figures at 6.1% after the 5.9% in July. If inflation, therefore, does not seem to be contained, the prospects for a larger-than-expected rate hike at the next FED meeting could grow. Then feeding the negative spiral.
The following graph, available from the Coinmarketcap platform, shows the price of Bitcoin over the last 24 hours:
Within minutes, the mother of cryptocurrencies saw a massive influx of sales. From $22,600 at 2:30 p.m., Bitcoin fell to $21,300 less than an hour later. As of this writing, the asset is trading against $21,427. This episode confirms that this week is decisive for volatility in the crypto market.
The altcoin market severely affected.
Like Bitcoin, all altcoins are also suffering from these bad inflation figures. While waiting for The Merge, Ethereum and the others pale in comparison. To the point of accusing, for the most part, more significant declines than Bitcoin.
The following table shows the price of the main altcoins and the losses over the last 24 hours:
While the crypto market had a rather positive day, it has just suffered significant losses: nearly $50 billion in market capitalization has just gone away in just one hour.
This downward trend is also found in the stock market. At the opening of the US stock market, the benchmark S&P 500 index gave up more than 2% of its capitalization. Same thing for the NASDAQ which fell 3.07% and the Dow Jones which suffered losses of 1.93%.
As is traditionally the case, this downward trend has also been contagious for the stock markets of the old continent. The CAC 40 has just lost more than 100 points in barely an hour, while the DAX 30 has lost 2% since the beginning of the afternoon.
The Tamadoge project: Credible alternative?
When investing in digital assets, the issue of diversification must be at the center of the strategy. If it is advisable to invest in priority on the main projects, it can be interesting to have young projects within your crypto portfolio. And among the most promising young projects of the moment, let's mention Tamadoge, the platform that brings Tamagotchis back into fashion in 2022.
Concretely with Tamadoge, the user will be able to see a virtual creature evolve, feed it and develop its skills. A true keystone of the entire ecosystem, the TAMA token is currently offered for presale at a price of $0.0275. It could be listed in the coming weeks on major decentralized exchanges.
To boost your crypto portfolio, start-ups are often great opportunities to generate profits. But they are also riskier projects. It is therefore advisable to invest with caution.
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