Cryptocurrencies extended their sell-off on Thursday, with Bitcoin dropping to a low of $25,401.05, its lowest level since 28 December, 2020 and the TerraUSD stablecoin crashing below its dollar peg.
The crypto market has been witnessing widespread turbulence after the Fed amped up rates last week. The crash has sent all cryptos into a tailspin has made investors nervous.
The broad-based plunge has triggered heavy selling in the cryptocurrency market as investors look to offload their holdings and minimise losses amid the ongoing uncertainty.
Should long-term cryptocurrency investors use the extreme volatility in the market to place their bets? Or, should they sit this period out.
‘Long-term investor always wins’
Sumit Gupta, Co-founder and CEO of CoinDCX, on Thursday suggested investors to hold on to their investments for long term if they have a strong conviction.
“I wouldn’t recommend to start selling out of fear and panic. This isn’t happening for the first time! Remember a long term investor always wins,” the CEO of CoinDCX said.
He further said, “The financial markets are behaving irrational these days. It’s not just crypto; the impact is been seen around the equity market as well.”
Ashish Singhal, Co-founder & CEO, CoinSwitch, said, “While it’s hard to predict which way things will move in the short term, in the long term I remain bullish about the industry’s ability to innovate and create value.”
‘Do your own research’
The Coinswitch CEO added: “Your actions should follow a sound assessment. Don’t buy because others are. Don’t sell because others are. Do your own research.”
A massive sell-off in cryptocurrencies wiped over $200 billion of wealth from the market in just 24 hours, according to estimates from price-tracking website CoinMarketCap.
The broad plunge in the crypto complex, driven by the collapse of the TerraUSD stablecoin, hit major tokens hard.
Ethereum, the world’s second-largest cryptocurrency, tumbled nearly 15% today to $1,700, its lowest since June last year.
Unlike previous sell-offs in broad financial markets, when cryptocurrencies have been largely untouched, the selling pressure in these assets this time has undermined the broader argument that they are dependable stores of value amid market volatility.
Meanwhile, a senior watchdog official has said that global market regulators are likely to launch a joint body within the next year to better co-ordinate cryptocurrency rules.
Focus on cryptocurrency markets has intensified again this week amid more wild volatility that has long-alarmed watchdogs.