© André Francois McKenzie-Unsplash
It was rather unexpected, even if the macroeconomic signals were starting to accumulate: the Bitcoin price just collapsed by up to -17% this Monday – a volatility that has become quite rare in recent years. The crypto asset is indeed starting to establish a certain respectability.
It is endorsed by large investment funds, particularly American ones; including the huge Hedge Fund BlackRock, which sees a future in it as “digital gold”. The latter have recently been authorized by market authorities to offer classic contracts indexed to the value of the cryptocurrency.
Why Bitcoin is having a particularly dark Monday
Enough to allow Mr. and Mrs. Average to expose themselves to cryptoassets without really opening a wallet and going to an exchange. The subject has caused the massive expansion of the presence of traditional investors on this market. The financial authorities recommend that Hedge Funds offering indexed contracts hold an appropriate amount of Bitcoin themselves.
But here's the thing: while this incursion, it was imagined, would be conducive to the sustainable return of an upward trend – driven in the United States by many actors, including politicians – it also has an effect that was less expected. Traditional finance money thus seems to expose crypto more to stock market fluctuations. And this has been giving some rather worrying signs for a few days now.
200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000Thus, the Nikkei also experienced a black Monday, with a particularly hard fall of 12.4%. The other major financial markets are holding up, but are struggling to return to the green. And everything indicates that the trend is rather towards the accumulation of bad signals in the coming weeks. Main cause: the perceived risk of recession in the United States.
Note that at this stage we are only talking about a risk, and not a proven situation. But some indicators are there and they are not good. The unemployment rate, in particular, was at 4.3% in July, compared to 3.7% in January. A situation that raises fears of the beginning of an economic slowdown, with companies becoming reluctant to hire.
However, it is necessary to qualify this indicator. August is traditionally a less successful month throughout the northern hemisphere. Another problem: the effect of the rapidly approaching presidential elections across the Atlantic on the markets. This risks causing a lot of movement to avoid any risk-taking on the part of traditional investors.
On the other hand, cryptocurrencies, including Bitcoin, remain considered riskier assets. In the event of a proven American recession, we should therefore perhaps expect, indeed, the return of the red color for the price of cryptocurrencies. However, it is probably still too early to panic – and some could even bet on a rapid return of the rise in crypto prices, causing the index to rebound, if the buying movement becomes massive.
- Bitcoin collapsed by more than 17% this Monday.
- The price suffered between others the perceived risk of recession in the United States.
- But also its growing exposure to the traditional stock market via Hedge Funds.
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