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INTERNATIONAL – Bitcoin is no longer boring.
After months of tranquility that have become the envy of equity investors, the largest cryptocurrency has rekindled public awareness this week with the biggest sell-off since August, another fork and cameo in a major earnings report of semiconductors.
Some digital resource industry experts have already started referring to it as the winter crypto.
Bloomberg Intelligence says the drama has just begun. Analysts expect the price to fall to $ 1 500 (R21 003.08), which would mean a further drop of more than 70 percent from current levels.
The digital token has plunged 12% from Wednesday to its lowest level for over a year and has lost more than 60% of its value so far this year. Many of the peers closest to Bitcoin, including XRP, the cryptocurrency also known as Ripple, have fallen into tandem.
"Last night I did not sleep well," said Travis Kling, founder of the Ikigai hedge fund, while monitoring the Bitcoin Cash division.
"It's a small possibility that it's hard to estimate, that something really bad could happen in relation to Bitcoin Cash that could therefore have an impact on the entire cryptography market."
Some investors believe that two versions of Bitcoin Cash, which had interrupted the original Bitcoin in 2017, could ensure that investments and miners were removed from the largest cryptocurrency.
This was answered by Mike McGlone, the Bloomberg Intelligence analyst who warned that the slide could get a lot worse.
The crash "was triggered by the Bitcoin Cash rigid fork pump," said McGlone.
"That pump that started a few weeks ago, made the market gain a little too much margin with the long speculative games that were playing for the good old days, but this is a lasting bear market."
The bad news did not stop here. The chip makers were also hammered today as Nvidia issued weak sales forecasts for the current quarter, claiming to have witnessed a persistent loss of demand from the collapse of cryptocurrency mines.
The extraction of digital tokens, the computer code that brings value to online transactions, has helped to stimulate the demand for graphics chips of the company. The shortcomings linked to a peak in demand from miners have led to an excess supply of parts when the cryptography market has crashed.
"The fall in Nvidia's share price reflects a future in which cryptocurrency has fueled demand," said Peter Mallouk, president and co-chief investment officer of Creative Planning, in an email.
"Although this is, of course, bad news for Nvidia, it really is the canary in the coal mine for Bitcoin and other cryptocurrencies."
Nelson Saiers, a former hedge fund manager who has become an artist, hopes the renewed focus will help raise the profile of his work – he is installing Bitcoin inflatable rats in London and Washington to show the influence of the token on society.
"They exist without permission, they are hated, hunted and persecuted," he said on rats, which act as a proxy for Bitcoin in his art. "Yet they are able to bring civilizations to their knees."
Or maybe just the ones that look great on cryptocurrencies.
Bloomberg
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