The cryptocurrency trading market capitalization has plummeted to $1.6 trillion from $1.7 trillion in the previous 24 hours. Bitcoin, the world’s most popular cryptocurrency, is currently worth nearly half of what it was in November when it peaked at $69,000. After Russia announced a crypto mining and trading ban, not just Bitcoin, but other tokens such as Ethereum, Dogecoin, Shiba Inu, Solana, and others saw their share prices plummet.
Michael J Saylor, Co-Founder & CEO of Nasdaq-listed business analytics startup MicroStrategy Inc, highlighted two explanations for the current crypto meltdown in a recent interview with Bloomberg Studio anchor Emily Chang. Saylor’s most recent views on cryptocurrency were delivered during a broadcast on January 20. “I think there’s a lot of variables here,” Saylor said, citing two explanations for the recent crypto market meltdown. When it comes to the crypto ecosystem as a whole, there’s a lot of regulatory ambiguity, especially when it comes to stablecoins and crypto tokens, and whether or not they’re securities. And that makes me a little nervous.”
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He also discussed how the rise of Decentralised Finance (DeFi) exchanges has increased the volatility of cryptocurrencies. DeFi, for the uninitiated, is a various financing ecosystem in which people may transfer, trade, borrow, and lend bitcoin without the involvement of traditional banking or the regulatory systems that surround banking. The DeFi movement attempts to “disintermediate” finance by removing the need for cooperation and middlemen from operations by utilizing computer code. “You have such a lot of clout in the offshore market. There are several crypto exchanges that provide up to 20x leverage. And those digital currencies have a lot of cross-collateralized tokens. You may achieve considerably more than 20x leverage using them and the decentralised finance [DeFi] exchanges. That’s the secondary link of turbulence.”
The present market circumstances, according to Saylor, give “a perfect entry point for crypto-curious investment firms who have been waiting on the sidelines.” At this point, I believe it is solidifying. For institutional investors, this is an excellent entry point. I speak with high-net-worth people, family offices, public business leaders, and private company owners that have witnessed the rise of Bitcoin in 2021. And a lot of people would be terrified to own it if it increased 400% a year.” MicroStrategy, meanwhile, revealed earlier this month that it had bought $250 million in Bitcoins to use as a “main treasury reserve asset.” The corporation has continued to amass Bitcoin, and its CEO has become one of the most outspoken proponents of cryptocurrency. MicroStrategy presently holds 1,24,391 Bitcoins, which are valued at $4.85 billion.