Bitcoin is suffering one of its worst declines ever
of ConsumerAffairs
The July employment report, coupled with other recent economic data, triggered a stock market sell-off that has extended into this week. Recession fears are causing chaos on Wall Street.
Gold and Bitcoin, two safe-haven assets, havent been spared.
Bitcoin and other digital currencies took the bigger hit, with the price of Bitcoin dropping by 20%, going below $50,000 for the first since February. But there may be more than recession fears behind the sell-off.
Tim Kravchunovsky, founder and CEO of the decentralized telecommunications network Chirp, says were experiencing one of the biggest crypto sell-offs weve seen this cycle.
"But this time, its not a crypto-specific issue rather, macroeconomic factors are in the driving seat, Kravchunovsky told ConsumerAffairs. With the Bank of Japan unexpectedly raising rates and fears that the U.S. Federal Reserve made a mistake by keeping interest rates unchanged at its July meeting, all risk assets are on the chopping block. Crypto assets just went first because they trade 24/7. "
Kravchunovsky says Bitcoin rallied Monday to above $50,000 and he predicts it will recover faster than traditional equities.
Gold is faring better
Gold also took a hit, but not as severe. The spot gold prie was down 0.8% at $2,425.04 early Monday before recovering a bit. But the retreat began near golds record high as many investors still consider it a safe haven.
Adrian Ash, director of research at Bullionvault, told CNBC that not all selling was due to a lack of faith in the precious metal. He notes that many traders are liquidating some winning positions to free up cash for when the sell-off bottoms, and to cover margin calls.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-08-05 16:45:12
