The total cryptocurrency market has fallen to a market value of $ 1.22 trillion over the past week. Previously, the Fed raised interest rates by 0.5 percent in response to inflationary pressures. In response, US stock markets and cryptocurrencies fell sharply.
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Bitcoin and Ethereum have fallen by 54 percent and 50 percent, respectively, from their record highs in November 2021. It is a price drop that affects not only individuals but also companies whose investment strategies involve bitcoin. Lena El-Deeb, Research Associate at 21shares, explains: “Thanks to a Bitcoin-backed loan, MicroStrategy currently owns about 129,218 Bitcoin, which was purchased at an average price of around $ 30,700 per Bitcoin. If the Bitcoin price falls below If the software analysis company falls to below $ 21,000, it will either have to sell some of its holdings that support the loan or provide more bitcoin as collateral, while Tesla will suffer an even bigger loss, with the company holding around $ 43,200 bitcoins, which will average $ 34,000. “
Buying and selling Bitcoin over the years
Even more air down
If these large institutional investors decide to dump their BTC holdings, the price could drop to around $ 20,000. This option, shocking to some at first, is nothing new in terms of bitcoin price movements when looking at price history over the years. In February 2018, the Bitcoin price fell sharply for the first time – by half its value to 8,000 US dollars. Just shortly before, in December 2017, the asset had crossed $ 19,000. The price recovery that followed took a full two calendar years. But in the years that followed, the recovery period dropped to just a few months. The trend of accelerating recovery time may continue given the increasing institutional adoption of cryptocurrencies, particularly bitcoin. They could have a leverage that will lead to what 21shares estimates will be a recovery within the next quarter. And even in times of falling prices, worldwide crypto adoption continues.
Cryptoregulation and adoption
Argentina: Just days after Banco Galicia, Argentina’s largest private bank, decided to start crypto trading, Argentina’s central bank banned it. The reason: Argentina’s central bank was allegedly put under pressure by the International Monetary Fund, which had given the country a bailout package of $ 44 billion in 2017. Uganda is also implementing a nationwide effort this week against digital payment providers that facilitate cryptocurrencies.
Nigeria: The West African Federal Republic of Nigeria upgrades its digital central bank currency (CBDC) eNaira: With its latest update, eNaira should also be able to be used for a wider range of goods and services. At the same time, according to a UN report, the Nigerian central bank is also tightening its access to cryptocurrencies, thereby paralyzing the country’s fintech sector.
Japan: The Japanese e-commerce site SBI Motor Japan announced that it will accept Bitcoin and Ripple for its used car sales. This is the first time that Ripple has been implemented on a cross-border e-commerce site in Japan.
Italy: On May 4, when Bitcoin trades at $ 38,000, fashion company Gucci announced that it would start accepting cryptocurrencies in some US stores later this month and plans to expand the pilot project to all of its North American stores.
USA: US trading firm Jane Street has raised a $ 25 million loan raised from BlockTower Capital through Clearpool, an Ethereum-based provider of decentralized capital markets, promoting the spread of DeFi. Clearpool enables institutions to take out unsecured loans through a network of lenders and is backed by venture capital firms such as Arrington Capital and Sequoia Capital. (kb)