With the Bear Market, the Specter of a Lehman Brothers on the Cryptocurrency Universe Is Resurfacing.
The current crisis is reminiscent of the global financial crisis after the collapse of Lehman Brothers in late 2008.
The cryptocurrency crisis started last November in a classic way, as a natural correction after the euphoria. Bitcoin was then worth the equivalent of more than a kilo of gold compared to the third today. Since its birth, Bitcoin has gone through cycles of booms and busts that have not stopped its forward march. This bubble-resistant asset has contributed to its fame and popularity.
It was not until January 2022 that the speculative bubbles that formed on the Nasdaq and or the cryptocurrency market telescoped. The correlation of cryptocurrencies with technology stocks, which was negligible until 2020, then remained at a high level. Bitcoin is now filed with risky assets. This is a mistake in my opinion, as Bitcoin is a risk-off asset if you understand its why, but it does reflect the reality of the market right now:
When the markets are euphoric, investors buy it along with other risky investments. Same thing when they sell. Cryptocurrencies are in the sphere of influence of markets and central banks for better, benefiting from abundant liquidity, and for worse, suffering from brutal credit rationing. They have been penalized by the monetary tightening of 2022.
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