Cryptocurrency Market Loses $ 200 Bln Due to Bitcoin

The value of the cryptocurrency market fell down to $900 billion from a value of $1.1 trillion early on Tuesday, according to crypto data firm CoinMarketCap. Bitcoin is behind much of the decline, falling 17% over the past 24 hours—wiping out about $125 billion in market value.

Meanwhile, Bank of America Securities Chief Investment Strategist Michael Hartnett warned that bitcoin looks like the mother of all bubbles, noting that its roughly 1,000% surge since the beginning of 2019 has been fueled by “violent” inflation, akin to the short-lived surges of gold prices in the late 1970s and tech stocks in the late 1990s, according to Forbes report.

Noteworthy, Bitcoin jumped above $29,000 to hit another record high on the last day of 2020, at the occasion of a groundbreaking year for the world’s largest digital currency.

The cryptocurrency jumped as high as $29,292 before easing slightly to trade at $29,043. It advanced nearly 50% in December, on track for its biggest monthly gain since May 2019.

“The key to this rally is that it has continued over a period of several weeks,” said Matt Long, head of distribution and primary products at the crypto-broker OSL in Hong Kong. “If we see a break to the downside, it would be helpful about the direction of first quarter flows, if we see institutions continue buying on a potential dip.”