The period between May 8 and 19 is an important date to consider. In 11 days, bitcoin’s market capitalization dropped by $555 billion.
In just under two weeks, the market capitalization of bitcoin (BTC) crumbled down $555 billion. This figure is higher than Argentina’s gross domestic product (GDP) which is USD 418 billion.
According to data and information provided by the TradingView index, after reaching a local peak of USD 1.1 trillion on May 8, the capitalization of the first cryptocurrency fell by 50% until reaching a figure close to USD 554 one billion yesterday, May 19.
In this period, the unit price of each BTC fell from $59,260 to $35,030. According to data provided by the International Monetary Fund, Argentina’s GDP was USD 418 billion in April 2021. This means that the fall in the capitalization of bitcoin was 1.32 times this figure.
Market capitalization measures a financial asset and how it impacts the economy. In the case of bitcoin, it is equal to the price of each BTC multiplied by the total currency (which is close to 18 million).
The gross domestic product of a country is a quantity that shows the monetary worth of the production of goods and services of final demand during a determined period, in this case, the period represents one year.
The World Bank’s Position about Argentina
The World Bank made a statement saying that Argentina’s GDP has fallen year after year since 2017 when it was USD 643 billion. But in South American regions, the strongest economy is that of Brazil, with a production that circles USD 1.49 billion annually.
On May 13, before another abrupt drop in the price of bitcoin and market capitalization, this media reported that the fall had surpassed Venezuela’s GDP almost four times in a matter of hours.
In less than three hours, bitcoin fell from $54,500 to $45,700, according to data from TradingView, overnight on Wednesday, May 12. This loss of market value represented a decline in bitcoin’s capitalization from $1.02 trillion ($1.02 billion) to $855 billion.
IMF Manages Data Regarding the Loss of Capitalization in Venezuela
On the other hand, data from the International Monetary Fund (IMF), Venezuela’s GDP for this year is 42,530 million dollars. Specifically, the loss of capitalization of bitcoin is equivalent to 3.9 times that amount, which shows the negative outlook in the country.
Despite the price swings in the short term, if the time reference is extended, it is observed that the market capitalization of BTC has increased, to date, more than 10 times since March 12, 2020. On that day, known as “Black Thursday,” the price of the cryptocurrency fell to $5,900 and its total capitalization was $71 billion.
By: Jenson Nuñez
