Influx of fresh capitals into cryptocurrency projects alongside funds plunged sharply during the first week of 2021 as the original cryptocurrency, bitcoin, turned tails and whacked out just a notch shy of a fifth of its valuation, data from digital asset manager CoinShares had unveiled late on Monday.
In point of fact, data from CoinShares had also pointed out a fierce wave of profit-taking throughout the first week of January, while some crypto brokers had been witnessing a havoc-scale outflows. Notably, latest data from CoinShares came forth days after the total cryptocurrency market cap had hit a record $1-trillion level, nonetheless, despite Monday’s unprecedented downfall in bitcoin valuation amid a slew of upbeat remarks on the digital asset, total assets under crypto industry still stood at an all-time high of $34.4 billion, up from just $2 billion registered at the same time a year earlier.
Crypto funds face off fresh droughts as bitcoin pommelled 19 per cent
On top of that, according to data from CoinShares released late in the day, new investments in crypto projects and funds fell sharply to $29 million from a record $1.09 billion during the week just before the Christmas holidays as bitcoin shrugged off more than 19 per cent of its market valuation to settle down at $35,452, marking up its largest intra-session plunge since March last year.
In actuality, prospects of quick gains alongside an unprecedented spike in corporate interest in crypto assets had catapulted bitcoin to shatter-past $20,000-level for the first time ever on December 20, while after surpassing a psychologically critical $20,000-level, bitcoin had more that doubled up in less than three weeks and jumped to a record $42,000 at some point during last week’s blistering rally.
Nonetheless, as fresh capital inflows in crypto funds had been met with a cynical stagnation thus far this year, referring to a likely correction course for bitcoin in a near-term outlook amid a spike in US Dollar’s safe-haven bid amid turmoil in Washington, a senior market analyst at OANDA in New York, Edward Moya said, “Bear market plunges and excessive volatility are powerful agents that scare away the uninitiated.
But we are initiated and would like to point out that this was to be expected and that we already saw a near-20% decline earlier last week”.