The Price of Bitcoin, the world’s flagship cryptocurrency, has crashed over 50% from its November highs of $69,000 towards less than $34,000 as of Monday.
The crash in bitcoin prices follows a decision by the US Fed to raise interest rates at least three times, precipitating the liquidation of most leveraged assets in the market.
Also, US Government recently announced that it will release an initial government-wide strategy for digital assets from next month, in a bid to access risk and opportunities in the crypto market for American consumers.
The effect of the crash has been felt all over the world, as crypto holders have urged “buying the dip” to cautiousness, as EL-Salvador President and Bitcoin Evangelist, Nayib Bukele hinted that he is happy to “ buy the dip” stating he did not miss the last “drop” as “El Salvador just bought 410 Bitcoin for only 15 million dollars. He also added, “Some guys are selling really cheap.”
Read: Nigerians pay as much as 37% more to buy bitcoin
Economist Peter Schiff noted that due to the orderly decline of Bitcoin, there hasn’t been much of a panic and warned that a flash crash may not even start until after Bitcoin breaks $30K. “So far the decline in Bitcoin has been very orderly. No one is panicking yet. It’s sliding a slope of hope. At some point, there’ll be a flash crash. That’s how these declines typically end. This flash crash may not even start until after Bitcoin breaks $30K. Then look out below!” he said.
The response to the crash has also been felt in Nigeria, responding to Nairametrics, Nigerian crypto stakeholders, founders and evangelists also urged caution, with various views on the forecast for the crypto.
Popular crypto influencer and promoter, Paul @kidbold told Nairametrics that crypto is currently experiencing sluggish activity, which is a key indicator for near-future price action
Read: Why are NFTs a big deal for Nigerian artists
“Bitcoin is no stranger to price dips, but the latest market activity has been undeniably sluggish,” he says.
He added that bitcoin is also struggling to keep above the $42,000 mark, a key indicator for near-future price action as Stocks in companies like Coinbase and MicroStrategy are down 32% and 43% respectively.
“Even a tweet from Elon Musk stating that Tesla would accept DOGE for merch purchases failed to elicit a major response, with DOGE rising 12% but then sinking 17% in the following days.”
He added that while the price action is muted, there are many strong fundamentals to look at, citing that, “After the BTC network’s hash rate plummeted amid power outages in Khazakstan, it hit an all-time high on Thursday. The number of BTC wallets with no withdrawals has been climbing steadily since June 2021”
Jude Dike, @bigbrutha_, Co-founder GetEquity and Equity DAO told Nairametrics that January is usually a time people restructure for the rest of the year, citing that some would say “buy the dip.”
Read: 51 countries have implemented bans on cryptocurrencies
“I’m usually inclined to agree, but I’d say a lot of it comes from watching what these whales do as well,” he said. Citing that crypto whales relating to the crash could also be related to whales (financial services companies with a lot of $$$ in AUM) moving and manipulating the markets.
Emeka Nwosu, @_Nwosu_, Co-founder & COO of Scalex a Nigerian crypto P2P system, stated that the recent crash in the crypto market was expected and we still expect some more corrections in the coming days to weeks.
He added that “2020 & 2021 was a monumental period for the crypto space with loads of protocols reaching new All-time highs and this also coincided with the influx of investors.”
He added that with the inflation figures coming out of the US and the expectation of monetary policies targeted at tightening money supply we are expecting a rise in interest rates this year, citing that most people will move assets from more volatile markets to more secure ones.
“The impact of this will be a sluggish recovery in the crypto market but it will recover because a lot of other possibilities have been unlocked. The Metaverse as well as Facebook and multiple tech giants moving into the blockchain space will continue to drive interest. So I predict a very healthy year for the Market. On BTC, the Lightening Network and Taproot will take centre stage this year. We expect to see good recovery on BTC, it is the Alpha Asset and it won’t disappoint,” he said.
