Cryptocurrencies suffer broad losses
Oh how the tables have turned on Elon Musk and his Tesla’s Bitcoin investment. Bitcoin has now fallen over 50% from record highs and erased away all the price gains that happened after the February 8th Tesla announcement that they would put bitcoin on its balance sheet and accept it as a form of payment. It got ugly fast for bitcoin after Musk focused too much on Dogecoin and suspended vehicle purchases using bitcoin on environmental concerns.
Today’s broad weakness across cryptocurrencies came from the next step in Beijing’s regulatory crackdown. China’s restrictions on cryptocurrencies are expanding and that has many investors nervous that panic-selling will continue.
Bitcoin’s crash approached the USD30,000 level and that has a lot of the new institutional money see all their profit go up in smoke. This looks like your typical flash crash, but there seems to be some hesitancy in getting back in.
Ethereum plunged below the USD2,000 level and appears to be stabilizing. A panic-selling event will lead many investors to be selective and buy the crypto that they think will be most successful and more importantly survive the regulatory hammer (China back in focus here) that seems to be coming. Ethereum’s blockchain is winning the use case argument and that should see it outperform its peers when the dust settles.
Coinbase will go down as one of the worst direct listings ever. Coinbase is getting crushed as the crypto markets collapse. The global crypto market is down over 25% today alone and this crash will not bode well for attracting new customers. Coinbase wants new crypto traders, but many will be afraid that this bitcoin crash could end up just like the one in 2017.
Coinbase’s trading debut coincides with the top for Bitcoin and many traders can’t make a convincing argument that it will be able to recover all those losses since then.
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