Cryptocurrency melts as a ‘perfect storm’ of fear and panic

Cryptocurrency prices also fell sharply. The price of Bitcoin moved down to $26,000 on Thursday, rising slightly after dropping 60% from its November highs. Bitcoin’s price movement since the beginning of the year closely mirrors the movement of the Nasdaq, a benchmark heavily weighted for tech stocks, suggesting that investors are treating Bitcoin like any other risky asset.

The price of Ether also plummeted, losing more than 30% of its value over the past week. Other cryptocurrencies such as Solana and Cardano also fell.

Some analysts have said that panic attacks may be exaggerated. According to Mizuho’s research, the average Bitcoin owner on Coinbase won’t lose money until the price of the digital currency drops below $21,000. That’s where, according to Dolev, a true death vortex can occur.

“Bitcoin was working as long as nobody lost money,” he said. “Once you get back to that level, it’s kind of a ‘Oh my God’ moment.”

Professional investors who have weathered cryptocurrency volatility in the past also maintained their composure. Hunter Horsley, CEO of Bitwise Asset Management, which provides cryptocurrency investment services to 1,000 financial advisors, met with more than 70 financial advisors this week to discuss the market. He said a lot of people didn’t sell because all other assets also fell. Some even took advantage of the downtrend.

“They say, ‘It’s not fun, but there’s nowhere to hide,'” he said.

Still, the plunging price has left cryptocurrency traders uneasy. Just a few months ago, blockchain proponents predicted that the price of Bitcoin could hit $100,000 this year.

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