What to Know:
- The crypto market has lost about $2 trillion since October, with Bitcoin down nearly 47% from its peak.
- Despite the crash, leaders at the Hong Kong Consensus conference remain positive about long-term growth.
- Some analysts warn Bitcoin could fall further, possibly toward $35,000 in the coming months.
The global crypto market has taken a heavy hit over the past few months, losing around $2 trillion in total value. Prices of major coins have dropped sharply, and many smaller tokens have fallen even more. Trading activity has slowed, and many investors are staying cautious.
Bitcoin is trading near $67,000 at the time of writing. That is about 47% below its October peak. Altcoins have seen even bigger losses. Many companies that held large amounts of crypto are now under pressure as the value of their holdings has dropped.
Sharp Fall After Record High
The latest slide began soon after Bitcoin reached a record high of more than $126,000 in October. Soon after that, the market saw a wave of forced sell-offs. More than $19 billion worth of leveraged positions trades made using borrowed money were wiped out. That triggered a fast and deep fall in prices.
The pressure increased again in early February, when Bitcoin briefly dropped close to $60,000, removing most of the gains made after the re-election of US President Donald Trump. Since then, prices have remained unstable and investor confidence has been mixed. But even with falling prices, the mood at the recent Consensus conference in Hong Kong was surprisingly positive.
“I do urge people not to just look at one point of time, because in crypto we go through cycles,” said Richard Teng, co-chief executive officer of Binance Holdings Ltd. Bybit Chief Executive Officer Ben Zhou put it more bluntly: “Now is a good time to buy Bitcoin,” he said during a question-and-answer session at the conference.
Yat Siu, Animoca’s executive chairman, said investors “aren’t too bothered” by crypto volatility, because the company remains profitable. “If you’re a sophisticated investor, you understand it’s volatile and this is still an early stage asset, so it’s going to go up and down,” he said in an interview.
Policy Support Gives Some Hope
While prices are weak, new US laws aimed at supporting digital asset growth have given companies some confidence. The first year of Trump’s second term as president also saw a flurry of public listings by crypto firms, including Circle Internet Group Inc. and Gemini Space Station Inc. Overseas companies, too, are looking to the US for public offerings. Hong Kong’s Animoca Brands said last year that it plans to go public on the Nasdaq stock exchange through a reverse merger with Currenc Group Inc.
Final Thoughts
Despite the massive $2 trillion hit to the crypto market, industry leaders are still painting a long-term positive picture and remain confident about where the space is headed.
The crypto market will always be volatile, with sharp rises and sudden drops. But long-term belief and investor confidence continue to be the driving forces behind the industry.
