Bitcoin (CRYPTO: BTC) and most altcoins like Ethereum (CRYPTO: ETH), Cardano (CRYPTO: ADA), and Ripple (CRYPTO: XRP) prices have crashed, erasing over $2 trillion dollars in value in the past two years.
The crypto market crash intensified this week, with Bitcoin moving slightly below the key support of $60,000. Ethereum dropped to $1,500, while XRP is approaching the important support level at $1.0.
Brian Armstrong Defends Bitcoin and Crypto
Brian Armstrong, the CEO of Coinbase (NASDAQ:COIN) is defending Bitcoin. In an X post, he noted that the crypto industry was thriving despite the ongoing crypto market crash. He pointed to the ongoing boom in the derivatives, stablecoins, and prediction markets.
For example, data compiled by DeFi Llama shows that perpetual exchange networks like Hyperliquid and Aster handled over $2.37 trillion in the first quarter and $1.37 trillion this one.
More data shows that the volume in the prediction markets surged to $34.7 billion in Q1, and has jumped to $24.6 billion in the current one. This growth will accelerate in the coming weeks as the World Cup starts.
The stablecoin industry is also booming, with the average daily volume surging to $117.1 billion. The average daily transactions has jumped to 58.8 million, while the average number of addresses has soared.
Armstrong believes that Bitcoin is just in a cycle, which will ultimately end. Indeed, data shows that BTC has gone through at least five bear markets since its launch. A bear market is defined as a period when an asset sinks by 20% from its recent peak and lasts there for at least two months.
Why Bitcoin and Altcoins Have Plunged
There are a few reasons why Bitcoin and most altcoins have dropped. The most notable one is the fact that the AI trade has sucked liquidity in the market. As a result, many investors have capitulated and dumped their coins.
Data shows that spot Bitcoin and Ethereum ETFs have shed over $1.7 billion in assets and $168 million this month, respectively. They have lost billions of dollars a year, with some of the funds going to the stock market.
The crypto market has also dropped because of the rising fear in the industry, where the popular Crypto Fear and Greed Index falling to the extreme fear zone of 12.
Additionally, there are signs that the industry has never recovered from the $20 billion liquidation event that happened on October 20 last year. Over 1.6 million traders were liquidated.
Most recently, there are concerns that Michael Saylor is starting to sell Bitcoin. Strategy sold Bitcoin last week, a major situation for a company that has spent years buying these coins.
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