Bitcoin Dips Below $30,000, Other Cryptocurrencies In Red

Bitcoin, the world’s largest cryptocurrency by market value, slumped to $29,764 (3,454,112.20 shillings) on Tuesday 10^th May 2022 before recovering to above $30,000 (3,480,000 shillings).

This is the first time since July 2021 that the cryptocurrency fell such low and is majorly attributed to the adverse effects of the cryptocurrencies track sinking markets coupled with aggressive US monetary tightening and surging inflation.

Tightening monetary policy to combat runaway inflation and ebbing liquidity turns investors away from speculative assets across global markets.

And because the world’s most significant digital token is still classed as a risk asset, no one is looking to buy the crypto dip just yet. This continues to expose crypto to the highest vulnerabilities.

“In light of fears of rising inflation, most investors have taken a risk-off approach — selling stocks and cryptos alike to cut down risk,”, Said the chief executive of Singapore-based crypto exchange Vauld, Darshan Bathija.

Other possible factors that pushed bitcoin to the lowest include short-lived fears that an algorithmic stablecoin called Terra USD (UST) could lose its peg to the dollar.

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The 5.42 per cent fall has now pushed the coin to trade at $32,763.16 (3,802,164.72 shillings) amid a broader sell-off for cryptocurrencies.

Many Investors who are now losing money on their investments have raised concerns about the possible growth and recession, creating a volatile environment for the cryptos.

Markets experts have warned that the downward trend is likely to continue for the next few days and might put bitcoin at risk of firmly dropping out of the range where it has been trading in 2022.

Apart from Bitcoin, most major virtual coins are also under pressure, with XRP falling 4.66 percent, Terra down by 2.84 percent, Solana fell by 4.68, Cardano was down 7.04 percent, while Avalanche fell by 5.85 percent.

Meanwhile, other cryptocurrencies such as Dogecoin and Shiba Inu also fell by 3.36 percent and 8.34 percent, respectively.