A year and a month ago, the price of BTC decreased 40%, three times the one that happened last Sunday. The drop in the market capitalization of cryptocurrencies was five times greater this time.
The founder and CEO of Alameda Research and derivatives exchange FTX, Sam Bankman-Fried (SBF), compared through Twitter the fall in the price of bitcoin last weekend with the notorious retracement that occurred on March 12, 2020, known as Black Thursday. This fall, which affected all markets just a year ago, coincided with the WHO declaration of the Covid-19 pandemic.
The researcher referred to March 2020 crash in Twitter as “the worst day for cryptocurrencies,” with bitcoin’s price crumbling down by nearly $ 4,500, from $ 8,000 to $ 3,500, before finding a stable recovery of around USD 5,000.
“The industry almost died that day,” said SBF, also highlighting that many market participants suffered massive losses. The cryptocurrency market demands resilience, SBF claims, but it was not prepared to withstand a BTC price level below $ 4,000. The subsequent liquidations on March 12 caused a loss of $ 100 billion in the market capitalization of bitcoin.
For FTX, March 12, 2020, was an unforgettable day, as the volume traded that day reached USD 5 billion, says SBF. But it was not mean that they had to celebrate. “It would have been like bringing champagne to a funeral,” said the executive.
The price collapse that day was close to 40%, which indicates the stabilization price at USD 4,800. However, the cost of BTC gradually healed after the crash, SBF claimed. A month after the fall, on April 20, 2020, the price of BTC had recovered by 90% to approach USD 7,200.
BTC Price Crumbles Down
Regarding the curious price decrease on Sunday, April 18, a downward movement of the current cycle occurred after the price registered on April 14, a new historical maximum above USD 64,000.
In the SBF chart, the deterioration of March 18’s price went from a level close to USD 62,000 to almost USD 50,000 to stabilize with USD 54,830, representing less than 12%.
However, SBF highlights that the total decrease in the price was USD 12,000, which led to removing some USD 500,000 million from the total capitalization of cryptocurrencies, five times more than in March 2020. Settlements amassed about USD 10,000 million.
SBF also said that a year ago, the market would have considered a price level under USD 4,000, but, according to market expectations and to SBF, that minimum level is USD 50,000. The executive disagrees with that perception. “$ 50,000 is perfectly possible. We had that level a few weeks ago!”
Among the reasons that caused the price drop this Sunday, the most mentioned is the 40% decrease in the Bitcoin hash rate due to the failure of miners in the Chinese province of Xinjiang due to power supply problems.
By: Jenson Nuñez
