At the end of New York on Thursday, May 12, the main contract of CME Bitcoin futures BTC was reported at $28,485, down 2.43% from the end of New York on Wednesday. The intraday trading range was between $30,100 and $25,350, and it broke the psychological barrier of $30,000 three times in a week. ; The main contract of CME ether futures DCR was reported at $1919.50, down 7.63% from Wednesday, and was trading in the range of $2190.00-1706.50 during the session.
The entire cryptocurrency market lost more than $500 billion in value in the last week alone, according to CoinMarketCap; more than $1 trillion worth of cryptocurrencies have been wiped out since November. What caused the market shock even more was the “death stampede” of the third largest stablecoin in the cryptocurrency market, UST and its sister token, Luna.
On Friday, the seven-day losing streak of bitcoin finally climbed back above $30,000 from its lowest point since December 2020, and a number of cryptocurrencies also recovered from the market rout under the overweight of investors. Bitcoin, the largest cryptocurrency by market capitalization, climbed as much as 9.3% on the day, according to CoinMarketCap; Ethereum, the second-largest cryptocurrency, rose about 9% to trade at $2,065, down more than 20% over the past week; Other cryptocurrencies such as Cardano and Solana also surged 28% and 20%, respectively. Meanwhile, dogecoin gained 18%.
Although cryptocurrencies recovered on Friday, compared with the $45,000 trading level for Bitcoin before the Russian-Ukrainian conflict, it is still far below the all-time high level set in November last year. In addition, this week marked its seventh consecutive week of losses and its longest weekly losing streak in its history. Before this year, Bitcoin had not seen such a long period of consecutive weekly declines.
Last year, cryptocurrencies were on fire. After years of being considered a fringe speculative product, cryptocurrencies have ushered in spring as they gain more legitimacy and investor favor. Tesla said it bought $1.5 billion in bitcoin, driving prices up; Coinbase went public last year as the “first stock of a crypto exchange”; and MicroStrategy, the world’s largest listed company holding bitcoin, firmly believes Bitcoin is “the most desirable property in space and time.”
In November, two cryptocurrencies, Bitcoin and Ethereum, reached all-time highs. Bitcoin was worth $67,802.30 at 5pm on November 9; Ethereum was worth $4,800. Now, they are down 58% and 60%, respectively, from their highs at the time.
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, warned:
Some traders may see this month’s sharp drop as an opportunity to buy the dip, but given its huge volatility, cryptocurrencies could be headed for further losses, and this latest slump in the Wheel of Fortune shows the risks of speculating on cryptocurrencies Extremely high and not suitable for investors who have no money to lose.
The stablecoin TerraUSD (“UST”, an algorithmic stablecoin designed to maintain a one-to-one peg to the U.S. dollar), mentioned in an earlier Wall Street News article, collapsed a few days ago after decoupling from the U.S. dollar, and last traded at $0.15; The misfortune is that its sister coin, luna, has actually plummeted 100% to zero by Friday, from over $80 a week ago. As a result, Yellen repeated her call at a Senate Banking Committee hearing on Tuesday for Congress to authorize regulation of so-called stablecoins.
Cryptocurrencies face other challenges, not least as they are getting closer to the trading trend of tech stocks. Data compiled by Bloomberg shows that Bitcoin’s 40-day correlation with the Nasdaq 100 is now at 0.82, close to a record (a correlation of 1 means the two assets are trading in perfect agreement; a reading of -1 means that They trade in opposite directions).
To make matters worse, cryptocurrency trading, originally an individual investor’s game, is now dominated by institutional investors such as hedge funds. But as prices fell, both individual and institutional investors exited the market. When Coinbase reported its first-quarter results late Tuesday, it revealed that it was losing users; by the close of trading on Thursday, Coinbase shares were 82% below their first-day trading close last year.
