Investors no longer expect crypto to hedge stock exchanges in times of crisis, according to Michael Cembalest, chief investment strategist at JPMorgan Chase Bank. The bear market in crypto deters investors, he said.
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The claim that Bitcoin could be a safe haven in the face of sharp declines on Wall Street is fading before our eyes, Cembalest noted, adding that there is a clear correlation between movements in the world’s popular digital currency and NASDAQ.
Bitcoin has already fallen 58% since its peak in November when it traded for $ 69,000 – now it is worth less than $ 30,000 and drops to almost $ 29,000. In total, the crypto market as a whole has erased $ 1 trillion from its value in the last six months since the highs.
Mining stocks crashed even more, as did other crypto-related stocks, such as the stock exchange Coinbase, and the “stable” crypto stock.
Coinbase lost 2.2 million users as of the end of the quarter compared to the end of the fourth quarter of 2021, its reports show. The stock has crashed more than 80% since its issuance a little over a year ago, with the sharp declines in currencies in the background. Shares of Riot Blockchain and Digital Marathon have also crashed since peaking more than 80%.
Last week, the world’s largest stable currency (tablecoin) – Tether, returned to the dollar, after more than $ 3 billion worth of coins left the system in one day. The crypto currency, designed to always be worth one dollar, plummeted last Thursday to a value of 95 cents and struggled to rise back to the dollar-linked peg. But the next day Heather was already trading back at one-dollar levels, allaying investors’ concerns about a possible leak from the collapse of the stable currency project, Terra.
Two days earlier, the value of the stable cryptocurrency TerraUSD fell more than 60% in 24 hours and more than 85% in the seven days before it, as part of a downward trend in the entire crypto market. The price of one Tara fell more than 91% from the peak it reached only in April this year, when it stood at $ 119.8.
A stable currency is a decentralized currency whose price is designed to be linked to a fixed exchange rate of fiat money, precious metal or other financial instrument, usually through a company or organization that backs the currency issued one-to-one through equity or debt owned by them.