In a dramatic development that is generating significant concern amongst South African Bitcoin investors and enthusiasts, the flagship cryptocurrency, Bitcoin (BTC), has plunged below the crucial $29,000 mark for the first time since June 22. This comes at a time when the broader global cryptocurrency market is also grappling with an eye-watering $21 billion fall.
As of the time of writing, Bitcoin is trading at around $28,930, marking a notable 1.5% drop in value over the past 24 hours. With Bitcoin being the largest cryptocurrency, it holds a colossal market capitalization of $562.6 billion. This sudden drop has sent ripples through the entire crypto ecosystem, prompting a 1.7% decline in the global cryptocurrency market cap, which currently sits at $1.164 trillion, as per data from CoinMarketCap (CMC).
According to analytics provider, Santiment, the abrupt decline in Bitcoin’s price can be linked with an increase in the asset’s one-day price volatility, which has risen from 0.0028 to 0.0035. However, Santiment also points out that Bitcoin’s current price volatility is still quite some distance from its local peak of 0.011, which it reached on July 14 when the cryptocurrency was trading at around $31,350.
This heightened volatility is paralleled by an uptick in BTC’s 24-hour trading volume, which has surged by an impressive 25% and is currently in excess of $13 billion. This points towards a significant increase in trading activity and liquidity in the Bitcoin market, factors that can often precipitate pronounced price swings.
In another significant development, there has been a surge in Bitcoin whale transactions (individual transactions worth over $1 million). These surged from 1,013 on July 31 to 1,344 on August 1, indicating heightened activity amongst major Bitcoin stakeholders.
Against this backdrop of heightened volatility and market activity, renowned author Robert Kiyosaki, known for his best-seller “Rich Dad Poor Dad”, has expressed his enthusiasm for Bitcoin. Kiyosaki, who has long been a vocal advocate of digital currencies, points out the ongoing financial conundrum in the United States. According to him, the rise in US stocks is largely attributable to the raising of the debt ceiling, suggesting potential economic instability.
As the South African economy continues to grapple with the effects of the global pandemic, many South African investors are looking to digital currencies like Bitcoin as a hedge against traditional financial market instability. This recent drop in Bitcoin’s value, therefore, is of direct relevance and potential concern to the South African investment community.