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    Crypto 'bekaar hai' phase begins for Indian investors who bought the dip

    Synopsis

    Bitcoin was trading at $35,572, while other major altcoins were also down by double digits, at 5 pm, Saturday, on Coinbase.

    CryptocurrencyETtech
    Mumbai: Indian crypto investors, most of who have jumped on the crypto bandwagon in the past year, are a jittery lot as cryptocurrencies again fell sharply across the board in the past 24 hours following a selloff led by technology stocks in the US on Friday.

    “I started investing last year after being influenced by friends and business partners,” said Gopala Somani, a Delhi-based crypto investor. “I kept investing even till the last week, thinking it was time to buy the dip. But now I am stuck. My portfolio is down and in the red. If I sell, it will be a significant loss.”

    Bitcoin was trading at $35,572, while other major altcoins were also down by double digits, at 5 pm, Saturday, on Coinbase. Bitcoin has dropped 17% in the past week, Ethereum 26.66%, Binance Coin 28.74%, Cardano 19.43%, and Solana 31.90%. The popular meme coin, Shiba Inu, dropped 30.03%, while DogeCoin slid 32 % in the past seven days. At 5 pm on Saturday, the Coinable website said the overall market was down 12.19%.

    Crypto Tracker
    TOP COINS (₹)
    83 (0.07%)
    5,841,765 (-0.88%)
    298,029 (-1.63%)
    48,166 (-2.44%)
    15,546 (-4.27%)
    Bloomberg reported that the latest crash erased more than $1 trillion in crypto market value.
    Several Indian crypto investors such as Somani are panicking as the extreme volatility the asset class has exhibited over the last few days has sharply eroded portfolio value and many are in the red after having invested in such coin during the 2021 bull run.
    “The seasoned investors were expecting this correction, but the average investor wasn't. The charts were showing bearish patterns. Most people who got into crypto last year are at a loss. They are now trapped. They can’t buy a dip because they don’t have money and don’t want to sell to incur large losses. Currently, it's a crypto bekaar hai phase,” said Vishal Gupta, a popular crypto commentator. “Indian masses had unrealistic expectations of crypto. A lot of Indian investors were led by the ads put out by the exchanges.”

    Crypto experts say that investors should carefully evaluate the current dip in prices and that the volatility shouldn’t scare them off.

    “We need to take an eagle’s eye view of the global financial markets to get the real picture,” said Jay Hao, CEO of OKX.com, the world’s second-largest cryptocurrency exchange. “The financial markets across the globe are under tremendous pressure due to growing inflation and the strict monetary policies of powerful nations like the US. Every market goes through a correction phase, and the crypto market is undergoing a correction phase after touching the $3 trillion mark in November last year.”

    The sharp dip in Bitcoin, the world’s largest cryptocurrency by market cap, is especially a worry for serious investors. But market watchers say investors shouldn’t panic.

    “Bitcoin peaked twice above 60k in 2021 and retreated back to the average traded rate of January 2021. The price of Bitcoin is still way above the highs of 2020, where the bull run started,” said Praveen Kumar, founder and CEO of Belfrics Group. “If the market sentiment remains weak, there could be a run down to test various technical support levels and a physiological level of $30k.”

    BuyUcoin CEO Shivam Thakral said investors should look at the dip as an opportunity to buy more assets. “It was January 15, 2021, when Bitcoin was hovering around $36,000, so its current dip in price seems more of an opportunity rather than a crisis,” he said.

    A combination of factors is weighing down the crypto market--tightening of monetary policies by central banks, regulatory confusion, a prevailing broader sell-off across assets like equities, inflation worries and Omicron-related uncertainty. “The global investors seem to have reduced their risk appetite,” said Gaurav Dahake, CEO and founder, BitBns.

    On Thursday, it was the Russian central bank’s proposal to ban the use and mining of cryptocurrencies that spooked the crypto market, while the correction on Friday was due to the tech stock sell-off in the US. The Nasdaq Composite dropped 2.7% to 13,768.92 on Friday.

    Experts said there is a strong correlation between tech stocks and Bitcoin. The other coins broadly mirror Bitcoin.
    Bloomberg reported that the 100-day correlation coefficient between Nasdaq and bitcoin reached .40, a reading that is among the highest going back to 2011. “The correlation between the crypto market and other speculative markets has resulted in widespread losses,” said Dahake.

    Crypto investors are also looking at tech firm Microstrategy’s tussle with the Securities and Exchange Commission with interest after the US regulator rejected the company’s Bitcoin accounting strategy. The company holds 124,391 Bitcoins and its chief executive, Michael Saylor, is one of the biggest corporate cheerleaders of the currency.

    Last year was a landmark year for digital currencies in India, as cryptocurrencies became part of the Indian investor’s lexicon. According to industry sources, about 20 million people in the country joined the crypto bandwagon in 2021, and Indians hold crypto assets worth $5.3 billion.

    A bull run that saw coins touch record highs, high returns on initial investments by early investors, high-decibel advertising campaigns run by exchanges, and aggressive campaigns by social media crypto influencers all contributed to India becoming the world’s fastest-growing crypto market last year.

    Cryptocurrency—Price—Performance in last 24 hours

    Bitcoin—$35,572—(-8.46)

    Ethereum—$2447.95—(-14.59%)

    Binance Coin-$343.48—(-17.37%)

    Solana-$98.02—(-20.55)

    Cardano- $1.02—(-17.39%)

    Polkadot-$18.69—(-16.79%)

    Avalanche-$58.17—(-23.63)

    Shiba Inu-.00001920—(-25.58)

    Matic-$1.54—(-18.23)

    *Saturday 5 PM, Coinbase




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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