Bitcoin has reached new lows as experts warn that the embattled digital token hasn’t hit anywhere near rock bottom.
Bitcoin has plunged to new lows amid a horror 72 hours for the cryptocurrency.
By 8pm AEDT on Monday, the top-ranked blockchain tanked to US$23,740, the lowest it has been since Christmas 2020.
Bitcoin has lost more than 10% of its value in a day.
Its a massive drop from eight months earlier, when bitcoin was worth $69,000 per token in November.
But cryptocurrency is in for a rough couple of weeks as experts warn that the embattled digital tokens haven’t hit anywhere near rock bottom.
Last week, an eye-watering $US100 billion ($A142 billion) was wiped from the combined cryptocurrency market capitalisation, according to Forbes.
Prominent blockchains suffered a significant hit including bitcoin, ethereum, BNB, solana, cardano, XRP, dogecoin, polkadot, tron and avalanche.
Ethereum didn’t fare much better than its bitcoin counterpart; the second most popular cryptocurrency sank by 20 per cent over the weekend, dropping to $1946, which was its lowest level since March 2021.
Cryptocurrency is no stranger to fluctuating price points and its volatility has often led to advocates encouraging other traders to buy while the value is lower.
However, one expert has warned the strategy won’t work this time around.
Peter Schiff, chief economist at Euro Pacific Capital, warned that “buying the dip” was not a good idea.
On Sunday, Mr Schiff warned in a tweet: “This could be a rough weekend for crypto.
“Bitcoin looks poised to crash to $20,000 (USD) and ethereum to $1000.
“If so, the entire market cap of nearly 20,000 digital tokens would sink below $800 billion, from nearly $3 trillion at its peak. Don’t buy this dip. You’ll lose a lot more money.”
Another crypto pro, Benjamin Cowen, warned that many alt coins wouldn’t survive the current bear market.
“The cold hard truth is that many alts (not all) will never see a new all-time high again,” he wrote on social media to his 650,000 followers.
This could be a rough weekend for #crypto. #Bitcoin looks poised to crash to $20K and #Ethereum to $1K. If so, the entire market cap of nearly 20K digital tokens would sink below $800 billion, from nearly $3 trillion at its peak. Don't buy this dip. You'll lose a lot more money.
— Peter Schiff (@PeterSchiff) June 11, 2022
The bear market will make #BTC maxis out of many of you.
Sure you can make money on alts in a bull market, but in bear markets they get rekt against USD and against #BTC
And the cold hard truth is that many alts (not all) will never see a new all time high again.
— Benjamin Cowen (@intocryptoverse) June 12, 2022
Cryptocurrency has been facing a reckoning in recent weeks – and particularly the last few days – as fears mount over a global recession amid rampant inflation and the US central bank hiking interest rates.
On Friday, data found the USA’s inflation rate had reached a new high, rising to 8.6 per cent in May – which is the worst its been since 1981.
This Wednesday, the US Federal Reserve is expected to raise its interest rate to combat spiking inflation.
Economists predict the rate will be increased to settle on 0.25 per cent or 1.50 per cent for July, with the central bank doing a similar thing last month.
Spooked investors have pulled out of cryptocurrency, and also the broader stock market.