As the crypto market adjusts, Bitcoin has fallen below the $20,000 threshold this Wednesday morning. The figure is a key psychological threshold, last encountered on June 22.
Factors causing this price tumble include macroeconomic worries and issues with crypto companies.
This hardly seems as an isolated event, limited to one coin, but rather an indicative sign that the whole cryptocurrency industry could be in disarray, with more coins already in the same boat or following the same route.
Lets take Ethereum, for example. Its the industry’s second-largest cryptocurrency, it also has fallen 7.45% in the day, painting the same grim picture and currently pricing at around $1,128.
The same sentiments continue to echo through out the cryptocurrency industry with Solana (SOL) down by 9.8%, trading at $35.16, Avalanche (AVAX) down 6.82% to $18.21, Binance Coin (BNB) also down 8.39% to $219.62.
Bitcoin leads and others follow
This recent price adjustment, in which the entire crypto-market cap fell below $900 billion, is indicative of dwindling investor confidence and increased uncertainty in the financial sector.
Recent CoinShares reports indicate outflows for Bitcoin-specific funds totaled $453 million, basically wiping out all the inflows made in the last six months.
This means that investors are looking for a sure bet and are thus transferring their money to more stable investments.
Swift action, panic or wise decision making describe necessary actions made on June 28, by many prominent companies to mitigate their investments.
A Canadian-based investment firm Cypherpunk Holdings sold 100% of its Bitcoin and Ethereum holdings in a move likely to trigger the same action in smaller firms.
Cyberpunk’s announcement stated that it sold 205.8 Ethereum for $227,600 and 214.7 Bitcoin for $4.7 million. This allowed them to accrued a total of $5 million in sale -proceeds from their two largest cryptocurrencies at the same time maintaining cash and stablecoins on hand.
Meanwhile, Sam Bankman-Fried, a CEO with the cryptocurrency exchange FTX, has stepped in to rescue struggling firms including BlockFi and Voyager Digital by offering credit lines.
“The market is taking a breather after the falls. There are still systemic issues as people prop up various dominoes from triggering knock-on effects,” Charles Hayter, CEO of website CryptoCompare, told CNBC via email.