The bitcoin market is experiencing a bearish period, and therefore, the prices of bitcoin have fallen even by 50% in one month. The on-chain entities are also experiencing historical losses because people started investing their money in bitcoins when they believed it would take a price hike.
According to reports and analysis, the losses suffered by the different investors from across the globe due to this crypto crash are more than ever before. Recently, the bitcoin prices were as high as $63,000 but now, it has gone as low as $30,000. When the crypto crash took place the last time in March 2018, the losses were measured at $4.53 billion for Bitcoin Investors.
According to the details and reports, the losses experienced by the Bitcoin Investors have reached $14.2 billion just in a week.
This huge decrease in the prices of bitcoin has created unrest among the investors and has also raised several questions in people’s minds. People are questioning if the bull market of 2021 will even remain in play for bitcoin. According to the reports, several interesting companies are still in profit because of bitcoins.
You will see that the current fear, uncertainty, and doubt have been reduced the number of profitable institutions or companies to 76%. If you look at comparing the recent three periods of 2011, 2013, and 2016, the metric shows that the highlight of proportion in the market purchased coins higher. The people who are believed to sell their bitcoins in recent times have also purchased a higher number of bitcoins, no matter the reason.
It is also reported that the major number of bitcoins were not sold by the ones who are holders of many bitcoins, but the small investors did it only in this website. Also, the ones who sold the bitcoins were not long-term investors, but they were short-term holders of bitcoin, and they aim at selling in purchasing bitcoins for making small amounts of profits but not aim at long-term and a huge amount of profits. Along with it, the sellers of bitcoins who were short-term holders also included the larger portion of the ones who bought the bitcoins in the last six months.
The major reason behind the crash in prices of bitcoin is considered to be two things. First, the tech giant Tesla has refused to accept bitcoins for its newly launched electronic cars. The main purpose of launching these cars is to eliminate the pollution rates in the whole world economy.
It can only be achieved if the company itself stops accepting bitcoin, and so it did. Along with it, another reason for the fall in prices of bitcoin is the market of China. The Chinese government has launched an order to the financial institutions that they should not accept cryptocurrencies because it may hinder the government’s control of the financial system and the financial powers of the people of the country.
According to the data, the sales majorly included the one or three-year-old coins, and the rest of them was significantly less and declined in the proportion of the total activity. It shows that the hands which were holding bitcoins for a very long period of time didn’t even shake due to this fall in the prices of bitcoins. The people who are holding bitcoins for a period of more than three years still maintain patience and did not run towards the exit from this bitcoin crash.
If we look at the profit ranges, it is said that there are a lot of companies who are still making a profit of around 9 to 9.5%, which is current market capitalization. The market capitalization of bitcoins is estimated at $700 billion, and also I have added on unrealized losses, which is near around $65 billion, which is also equal to the underwater value.
Even if the bitcoin prices are falling drastically and it has been a historic event in the bitcoin market, the underwater value of the bitcoins on the chain is actually relatively small. If we compare it to the unrealized losses of 44%, which existed in March 2020, and the unrealized losses of 114% in November 2018, it is believed to be a better situation than the past.
According to the experts, it is not going to be a stable position for bitcoin, and it may increase in the future again, becoming the best cryptocurrency to invest your money.
