15. June 2024

Bitcoin Sale – Bloodbath brings Bitcoin under $ 5900

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Today on Thursday, March 12th, 2020, an enormous sale occurred in a very short time. Over 20% minus in just one hour led to Bitcoin for a short time under $ 5900!

Sell-offs make investors tremble

Is the fear of the Corona Virus not only causing chaos in the stock markets now? Bitcoin crashes over 20% in just a few hours and pulls out all the altcoins. Ether loses over 30%!

The WHO recently declared the virus a pandemic, making it a global problem. The spread is unstoppable. Panic is spread. In Italy, for example, the mortality rate is said to be close to 5%. In Germany, this has so far been less than 0.2%. The German Bundesliga makes history and experiences the first ghost game ever. The NBA will suspend the seasonal games until further notice because a player has already become infected. Equity markets have seen new losses every day since the beginning of this week, worldwide. The DAX, for example, has slid below the 10,000 point mark for almost four years. So it appears to be a global crisis that is affecting all industries.

So far, there has been no extreme panic at Bitcoin. Although the price of Bitcoin also fell below the $ 9000 mark, which had been stable for a long time, the price settled at $ 7800-8000. At noon today there was a huge bloodbath, in which Bitcoin lost another 20% and more within a few hours. Ethereum was hit much harder.

Bitcoin verliert über 20% blutbad
Source: livecoinwatch.com

Reason for the bloodbath?

Nobody knows what led to this bloodbath. One can only speculate. The corona virus could be a trigger. BitMEX CEO Arthur Hayes predicted early this morning that Bitcoin would likely drop to $ 6,000:

The fear and uncertainty facing humanity is enough to inspire a global margin call. Bitcoin will not escape. While I don’t believe we will revisit $3,000, max pain probably resides somewhere between $6,000 to $7,000 Bitcoin. Any crypto hedge fund that allows quarterly or less liquidity will be getting distress calls.

Source: Crypto Digest 

So he doesn’t think Bitcoin will ever see the $ 3000 mark again. However, he already calculated that Bitcoin would give way and would drop to $ 6,000.

Hayes also emphasizes his optimistic mood about the Bitcoin price towards the end of the year.

As central bank printing presses switch into beast mode, Bitcoin should enjoy a nice run back through $10,000 towards $20,000 by year end.

So he expects a bitcoin comeback by the end of the year, which could push him back up to $ 20,000.

How likely is that?

It is not unlikely that Bitcoin will become a “safe haven”. So far, gold has benefited from the outbreak of the Corona Virus as a financial investment. Bitcoin is often compared to gold because it is similar but has more advantages than gold. Could the situation change and Bitcoin be digital gold? It won’t happen that quickly. Gold is still considered a crisis currency by most. Digital gold is not yet “up to date”. Many need something tangible in a crisis. Something that is completely independent of the Internet and electricity. In the long run, Bitcoin’s advantages (sending, storing, etc.) over gold could become clearer and the time could come when Bitcoin would become more attractive than gold. However, we do not expect it in the near future as long as a crisis dominates the mood.

However, bitcoin halving is just around the corner. Historically, the Bitcoin price has risen extremely after each halving. The same is expected now. Bitcoin will certainly meet this expectation, but not immediately after the halving. It is more likely that at the end of the year it will actually become apparent that only half of the current Bitcoin rewards are still in circulation. The Bitcoin price is on average only slightly higher than the average mining costs. The mining costs per bitcoin are likely to increase after the halving, which can lead to higher mining costs and thus to a higher bitcoin price.

In addition, institutional investors could increasingly find their way into the crypto business. For example, a legal framework has already been created in Germany since the beginning of this year, with which transactions in cryptocurrency are classified as a financial service and require a permit. However, banks are now also allowed to exclude the cryptocurrency business. Banks are very interested. It remains to be seen whether this development will spread to other countries in Germany. So far, crypto transactions have been in a kind of gray area that has created uncertainty among many investors. France, for example, recently classified Bitcoin as money. Either way, laws create more security that must come sooner or later to get more people for Bitcoin and co. to inspire.

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