The world’s largest cryptocurrency by market cap, Bitcoin, dropped to $52,000 amid a market sell-off on Monday. The price of the digital asset fell by 13 percent in just 24 hours, declining from $60,752 on August 4 to $52,312 on August 5, according to CoinMarketCap, a price-tracking website for crypto assets.
Similarly, other cryptocurrencies experienced a significant downswing. The price of Ethereum fell from $2,905 on August 4 to $2,261 on August 5, marking a decline of 22.46 percent in 24 hours.
Market Cap Shrinkage
CoinMarketCap also reported that the global cryptocurrency market cap shrank to $1.85 trillion, losing over $184.39 billion, or 14.06 percent, in the last 24 hours.
Economic Factors Contributing to the Drop
A report by the Economic Times stated that the dramatic drop was attributed to a hasty sell-off by investors due to geopolitical tensions, fears of a U.S. recession, and the global impact of the Yen’s appreciation following the Bank of Japan’s decision to raise interest rates to 0.25 percent and reduce bond purchases.
Predictions and Previous Peaks
On March 19, Standard Chartered Plc raised its 2024 forecast for Bitcoin (BTC) from $100,000 to $150,000, and predicted that BTC would reach an all-time high of $250,000 by 2025 before settling around $200,000. Additionally, on March 11, Bitcoin crossed $71,000 for the first time in two years.