This article was written exclusively for Investing.com
- Bitcoin lowest approach for 2021 on June 22 – Ethereum falls below the $ 1,700 level
- The number of tokens continues to increase even as the market cap decreases
- AAVE is the 28th leading cryptocurrency
- Amp is number 29, with a slightly higher market capitalization than AAVE
- The warning is the same – only invest what you are willing to lose
On April 14, when they crossed the $ 65,000 level, calls of $ 100,000 and above dominated the financial airwaves. Bull market action can make engaged bulls questionable. Jamie Dimon, chase chairman and ceo called Bitcoin a fraud just a few years ago and threatened to fire any trader from Chase who allegedly bought the digital currency. Over the past few months, the CEO has swallowed his pride and his words, allowing the bank’s major customers to include Bitcoin and other digital currencies in their wallets.
Bitcoin and many digital currencies hit record highs the day Coinbase (NASDAQ :), the crypto trading platform. The stock jumped to nearly $ 430 per share on its first trading day, even though the benchmark price was $ 250 per share. COIN’s market capitalization has reached nearly $ 100 billion, more than the CME (NASDAQ 🙂 or ICE (NYSE :), two well-established market exchange platforms.
Gravity can be a powerful force in the markets. After a few tweets from Elon Musk of Tesla (NASDAQ 🙂 objecting to the carbon footprint left by Bitcoin miners, China cracked down on the cryptocurrency asset class. The Chinese are preparing to release a digital yuan and are likely limiting competition. Moreover, like all governments, China will do everything in its power to control the money supply. Cryptocurrencies threaten the power of government because money is a critical control issue.
Bitcoin approached 2021 low on June 22 – Ethereum drops below $ 1,700 level
Since mid-May, Bitcoin and cryptocurrency price action has been nothing short of carnage.
The weekly chart shows the drop from $ 65,520 in mid-April to a low of $ 28,800 on June 22. The 2021 low was $ 28,440 in early January. After hitting a low on June 21, Bitcoin rebounded and traded at the $ 33,000 level later in the session.
, the second-largest cryptocurrency, has also fallen dramatically since peaking at $ 4,406.50 in mid-May.
Ethereum’s weekly chart shows the drop to a low of $ 1,697.75 on June 22. Ethereum rebounded above the $ 1900 level on the day it hit the last lowest peak. Ethereum traded at the lowest level since late March.
Bitcoin and Ethereum are trading at less than half the price at their peaks in mid-April and mid-May.
The number of tokens continues to increase even as the market cap decreases
At the end of 2020, a total of 8,153 different cryptocurrency tokens were floating in cyberspace. At the end of the first quarter of 2021, the number increased 10.9% to 9,045. As of June 22, it was 16.8% higher than at the end of the first quarter at 10,561 in chips. The price action in April and May that took Bitcoin and Ethereum to all-time highs prompted issuers to put more cryptocurrencies on the market.
Meanwhile, the overall market capitalization of the asset class has peaked at over $ 2 trillion in recent months. The level was just above the $ 1.3 trillion level on June 22. Bitcoin and Ethereum account for 64.2% of the market capitalization. The market caps of many of the other more than 10,500 tokens have declined alongside Bitcoin and Ethereum in recent weeks.
AAVE is the 28th leading cryptocurrency
(AAVE) is a decentralized money market that operates on the Ethereum blockchain. AAVE allows users to lend and borrow a range of crypto assets. AAVE website describes it as a “non-custodial liquidity protocol to earn interest on deposits and borrowing assets. “
As of June 22, AAVE’s market cap was $ 2.674 billion, with the crypto trading at around $ 214 per token.
As the chart shows, AAVE hit a low of around $ 26.20 in November 2020 and a high of $ 643.07 in mid-May 2021 when Ethereum peaked. The crypto rose more than twenty-four and a half times between the end of 2020 and the high of May 2021. At the level of $ 214 on June 22, AAVE was a third of the price at its high, as the crypto under- performed both Bitcoin and Ethereum when correcting prices.
Amp is number 29, with a slightly higher market capitalization than AAVE
(CHA) is a pledge platform for asset transfers. Amp‘s website says it provides cryptocurrency assets “instant and verifiable assurance for any real application. ” CHA has smart contract functionality for warranty.
As of June 22, CHA was the 29th cryptocurrency just behind AAVE, with a market cap of $ 2.633 billion at $ 0.06343 per token. Amp and AAVE have changed places in the rankings in the last few days.
The graph illustrates CHAThe price range from $ 0.005748 at the end of January 2021 to a high of $ 0.1179 on June 17. The price has recently halved even though CHA peaked after Bitcoin and Ethereum had already corrected from their April and May highs.
The warning is the same – only invest what you are willing to lose
The first six months of 2021 have been an exciting and volatile time in the cryptocurrency asset class. Prices skyrocketed before gravity hit cryptos, nearly halving overall market capitalization.
Cryptos offer more value at current prices, well below recent highs, and value-seeking investors could use the correction to recover some of the tokens. Meanwhile, risks remain high in the volatile asset class. Invest only what you can afford to lose, as most of the more than 10,500 cryptos will likely end up as dust collectors in computer wallets. There are rough diamonds in cyberspace, but the risks remain high even after the latest price corrections.
As we learned earlier this year, parabolic bull markets can drive prices above rational, reasonable, or logical levels. Corrections can crush prices. It is impossible to choose highs during bullish price movements or lows during corrections or in bear markets.
Having some exposure to the cryptocurrency asset class in portfolios makes sense as the medium of exchange reflects technological advancements in finance. However, only invest what you can lose because there are a lot more lumps of coal than diamonds floating there.