The price of bitcoin fell below $8,000 on Friday, as the market cap of the world’s biggest cryptocurrency fell to $138 billion. This marks a decline of more than $50 billion from the all-time high of $190 billion, which the market cap of bitcoin reached on September 2nd.
The cryptocurrency community was in shock after Elon Musk announced that his company, Tesla, was filing an Initial Public Offering (IPO). Tesla’s stock is set to go live in the next few months, and Musk is looking to raise billions of dollars using the IPO. When the markets opened, Bitcoin and most other cryptocurrencies dropped in value, shedding billions of dollars in market cap.
The digital currency markets have seen better days, with billions of dollars written off of the entire crypto economy after Tesla announced it would no longer accept bitcoin due to environmental concerns. The market capitalization of all existing crypto assets has fallen below $2 trillion, and most coins have lost between 5% and 30% in the past 24 hours.
crypto-economy loses billions after Tesla announcement
Bitcoin (BTC) and many other digital assets have come under selling pressure since Tesla’s announcement. The initial announcement a few weeks ago, when Tesla said it would accept BTC for payments, drove the price up. This review and the decision to no longer accept BTC due to environmental concerns drove prices down. Bitcoin fell to a low of $45,700 a pop on Wednesday night, but quickly recovered some of its losses.
Top five coins 13. May 2021.
At the time of writing, BTC is trading at $49,722 per coin and has lost nearly 12% today. The seven-day stats show that bitcoin is down 10%, but the monthly data shows that bitcoin is still up over 5%.
BTC/USD May 13, 2021 on Bitstamp.
The second largest market, occupied by Ethereum (ETH), is also down more than 12% today, but is up 104% in the past 30 days. The market capitalization of these two currencies accounts for over 60% of the total crypto economy, with BTC holding 42% and ETH 19.6%.
ETH/USD May 13, 2021 in Deribit.
Companies such as hydro (HYDRO), sai (SAI) and bnktothefuture (BFT) recorded the highest growth today. Among Thursday’s biggest losers were tokens like agrello (DLT), latoken (LA) and ripio (RCN). Currently, the market value of all existing coins stands at $1.99 trillion, down 8% over the past day. The global crypto economy is currently worth $233 billion, and stablecoins are in high demand.
Short-term impact and clean consensus
Over the course of Wednesday night and Thursday, a host of executives wrote to Bitcoin.com News and made statements about Tesla’s latest decision. Stephen Kelso, head of markets and cryptocurrency expert at ITI Capital, said the decision had a significant impact.
Elon Musk has made another significant impact on bitcoin, but this time by turning its price valuation upside down, Kelso wrote. This will inevitably lead to a short-term cooling for retail investors who were enticed to adopt bitcoin by Elon Musk’s initial valuation of the cryptocurrency. However, institutional investors better understand the importance of time periods when considering correlations and covariances in multi-asset portfolios.
In another post on Bitcoin.com News, London-based fintech investor and VP Capital founder Victor Prokopenya also addressed Tesla’s situation. Tesla’s value has risen more than any car company in the world, and its founder Elon Musk has become the richest man in the world, Prokopenya said. For now, cryptocurrencies are a problem, but in the future – when everything is share-proof – there will be no problem. It is true that many cryptocurrencies currently rely on proof of work or mining and are not very energy efficient, Prokopenya added.
The VP Capital founder continued:
However, this is about to change. One hundred years ago, they created the first automobile. Those cars had very high carbon emissions, but that doesn’t mean we stopped making cars – we improved the technology. The company has now made a zero-emission car, and we are moving towards a world where all cars will be environmentally friendly.
Another analyst, Simon Peters of Etoro, provided more details to Bitcoin.com News. Bitcoin, EtherIUM and other crypto assets are currently in correction territory, in most cases more than 20 percent below their highs, Peters said. The sell-off is the result of a number of factors: valuations were at or near their highest levels at the beginning of the month, which obviously leads to profit taking, while we also see a general sell-off in risky assets such as equities. B. Technology stocks – as the economy begins to recover from the pandemic and investors fear possible interest rate hikes and rising inflation.
Peters added:
However, for many crypto assets, such as bitcoin and ethereum, the long-term story has not changed. This emerging asset class will continue to revolutionize many aspects of financial services, and if nothing else, the long-term fundamentals of crypto assets remain as strong as ever.
Overall, most are confident that the markets will recover and that cryptocurrencies will generally do well in the long run. Elon Musk has become an enigma in the crypto-currency world, there are those who love him and those who really don’t. However, members of the cryptocurrency community were happy to hear that Tesla plans to keep its BTC shares.
What do you think of all the developments in the market after Tesla’s announcement? Let us know what you think in the comments below.
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