Bitcoin
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The bitcoin price has fallen sharply, dropping below $50,000 on Monday before recovering slightly. It previously reached $70,000 in July due to excitement over Donald Trump’s plans for bitcoin. The combined bitcoin and crypto market has lost around $800 billion since its recent highs.
Despite a “crazy” bitcoin price prediction from billionaire investor Mark Cuban, the head of institutional research at Coinbase has warned of further volatility. He believes that market jitters will persist in the short-term but could lead to a rebound in the next few days.
The crypto market began crashing on Sunday due to the unwinding of Japan’s massive yen carry trade. This trade involves borrowing in currencies with low interest rates and investing in higher-yielding assets elsewhere. The Bank of Japan hiked its benchmark interest rate last week, causing the trade to unwind.
Recession fears could intensify in the weeks ahead. According to Coinbase, this phase may last until mid-September. They expect a choppy market in the third quarter but believe that the current sell-off does not represent the start of a new market cycle.
Some smaller cryptocurrencies have been declining more sharply than bitcoin, with the downturn expected to wipe out some “altcoins.” The negative mood is particularly detrimental to altcoins, many of which are experiencing severe volatility and market cap erosion. Some may not survive the ongoing market correction.
Source: https://www.forbes.com/sites/digital-assets/2024/08/06/dont-be-fooled-coinbase-issues-serious-warning-after-800-billion-bitcoin-and-crypto-price-crash/