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Panic in the markets: bitcoin and the leading cryptocurrencies fall sharply

Panic in the markets: bitcoin and the leading cryptocurrencies fall sharply

In the early hours of Saturday, the most valuable crypto came to plummet more than 20% and fell all of the highest value after a week of fear for the omicron variant and inflation. The "risk aversion," due to the effects of the omicron variant of the coronavirus and rising inflation, was strongly felt this Saturday in the cryptocurrency markets.

In the early hours of the day, in the northern hemisphere, bitcoin, the cryptocurrency with the largest market capitalization globally, plummeted more than 20 percent but then recovered in part and limited the loss to just over 10 percent. On the other hand, as reported at 7:30 a.m. in Argentina by the site CoinMarketCap, the three leading cryptocurrencies, measured by capitalization, recorded sharp declines and erased tens of billions of dollars in value.

The largest, with nearly USD 900 billion worth of units in circulation, Bitcoin accumulated a loss of 16.85% in the last 24 hours. Ethereum, the second crypto with the second-largest circulating value, with USD 469 billion, fell 14.23%. And Binance Coin, the third, whose capitalization slightly exceeds USD 90 billion, had lost 13.1% of its value. All recorded falls of the ten crypto currencies with the highest value and circulation. The only two where the loss is slight are Tether and USD Coin, two "stablecoins," i.e., dollar-backed cryptocurrencies, whose declines are less than 1 percent. On the other hand, the fall of Polkadot exceeded 22%. At the same time, Solana, Cardano, and Dogecoin, the crypto "meme" that was born as a joke and became famous thanks to comments by Elon Musk, recorded losses of between 17 and 19 percent.

The bitcoin price touched USD 47,200, down 20 percent from a month ago. In addition, recently trending altcoins such as Shiba Inu fell as much as 14 percent, and on average, the global cryptocurrency market capitalization fell to just under $2.3 trillion, just over 16 percent below Friday's close. In comparison, trading volume over the past 24 hours totaled just over $200 billion.

The Coingecko platform, which includes data on nearly 11,400 different crypto assets, said that the total capitalization of the cryptocurrencies it tracks fell by almost 15% overall, to USD 2.34 trillion. It should be recalled that in the first half of November, when bitcoin hit a record high of USD 69,000 (on November 10), crypto capitalization had reached over USD 3 trillion. Beyond possible speculative maneuvers and "profit-taking" by some major players, the fall reflects the nervousness of the world markets about the possible effect on the economy of the omicron variant of the coronavirus and the expected interest rate hikes in the United States and by the world's major central banks, in reaction to rising inflation, which would weaken commodity prices and could lead to an international recession.

Negative week

The crypto plunge came on the heels of a damaging week for significant markets and indicators. The Nasdaq retreated 3 percent, and the S&P 500 fell 2 percent. One of the triggers for the negative mood and market overreaction was Friday's report from the Bureau of Labor Market Data for November: at the end of the month, the U.S. economy added 210,000 new jobs, less than half of the 550,000 anticipated by Refinitiv's survey of economists.

Although this figure was lower than expected, the U.S. unemployment rate fell to its lowest level since the start of the pandemic, and investors interpreted that the U.S. Federal Reserve (Central Bank) will now be more willing to tighten monetary policy to control inflation risks.

In this context, the shares of favored companies, such as Tesla, Etsy, and Adobe, which lost more than 5% of their value, fell. Facebook, meanwhile, lost 1.1% on Friday and more than 20% from its September high.

On Saturday, finally, these developments impacted, with the increase, the crypto world.

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