Total value of cryptocurrency market rebounds moderately after losing over $520B in matter of hours
The price of Bitcoin and value of the crypto market recovered slightly on Monday, two days after a major sell-off amid worries related to the omicron variant of the coronavirus and risks posed by Chinese real estate developer Evergrande.
After closing Friday at $53,709, Bitcoin saw its price plummeting to as low as $42,000 early on Saturday to close the day at $49,272 for a 8.26% daily loss.
Its price recovered to $48,800 as of 11.23 a.m. EDT (1623 GMT), according to official data.
The total value of the cryptocurrency market plummeted from $2.65 trillion on Friday to as low as $2.12 trillion on Saturday, losing over $520 billion in a matter of hours.
The crypto market’s total value later recovered, standing near $2.26 trillion at the time, according to data by digital asset price-tracking website CoinMarketCap.
The major sell-off came as the omicron variant has provoked fear that risky assets could see major losses as in March 2020, when COVID-19 hit.
Chinese firm Evergrande, which has about $300 billion in total liabilities,said late on Friday that it may not have enough funds to meet its financial obligations.
Investors are worried that the collapse of Evergrande could create a domino effect, similar to the US’ mortgage crisis in 2007, which turned into a global financial crisis the following year.
In addition, US Federal Reserve Chair Jerome Powell had indicated on Tuesday that the central bank would increase pace of tapering, the process known as reducing its monthly $120 billion asset purchases, providing less liquidity to the markets, thus less room for risky assets to grow.