Thu. Jan 27th, 2022

Bitcoin traders suffered their worst day in a month after turmoil in traditional markets spilled over into digital asset trading, causing nearly $ 900 million in bets to sour.

The liquidations that hit leveraged traders come after the US Federal Reserve seen that it could reduce monetary tightening sooner than many investors expected to curb rising inflation. The prospect of rising interest rates has caused prices to tumble in stock markets and pushed yields on government bonds higher.

The change in attitude also sparked sales in bitcoin, which lost 10 percent of its value in the past 24 hours trading at $ 42,645 according to the FT Wilshire bitcoin price gauge. The sharp drop of about $ 47,000 washed away $ 895 million in stock market positions, the biggest clearance since December 3, according to Coinglass data.

Bitcoin has lost 36 percent of its value since its peak in November, when it traded above $ 67,000.

The influence of events in traditional markets on digital asset prices was growth in recent months due to the involvement of Wall Street players in cryptocurrency markets. This has strengthened the relationship between stock markets and bitcoin’s price as large investors react to events.

Despite the rumors, Goldman Sachs predicted this week that bitcoin could reach $ 100,000 if it takes away market share from gold. Both are seen by some analysts and investors as a way to protect portfolios against rising levels of inflation that are currently sweeping the world.

Zach Pandl, co-head of global foreign exchange, interest rates and emerging markets strategy at Goldman, said bitcoin’s share in portfolios is likely to rise as the acceptance of digital assets continues, which could push up its price.

“Hypothetically, if bitcoin’s share in the market for securities would rise to 50 percent over the next five years. . . its price would rise to just over $ 100,000, ”Pandl wrote in his research note on Wednesday.

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