BTC is down more than 62% from its all-time high, and most NFT investors have not made a profit

As the Consensus 2022 conference is in full swing, the crypto market continues to see a wave of decline this weekend.

Various crypto indicators are down

Data shows that BTC fell below $26,000 and is now trading at $25,670. It has fallen by more than 62% from its historical high of $69,020 per coin in November 2021. As the market fell, the performance of various crypto indices was not ideal.

Data shows that the current average daily income of Bitcoin miners has fallen by 56%, and the mining market is still at a low level. Due to the unsatisfactory income of miners, the computing power of the entire Bitcoin network has also been affected. In the past month, the BTC computing power has fallen by more than 10%, and the number of blocks generated per hour has also decreased to 5.85 BTC.

Glassnode data shows that the number of Ethereum loss addresses (7-day MA) reached 36,321,323.268, a record high. The percentage of Ethereum profitable addresses (7d MA) fell to 55.667%, a 22-month low.

With the continuous decline in the past two days, according to data from Dune Analytics, the mainstream DeFi lending protocols have liquidated more than $12.7 million in the past 24 hours. The total locked-in volume of DeFi protocols fell below $100 billion, and the total locked-in volume (TVL) of DeFi protocols reached $96.53 billion, a 24-hour drop of 5.07%. Companies investing in cryptocurrencies are also having a hard time. Watcher.Guru tweeted that MicroStrategy 's Bitcoin investment account has now lost about $330 million.

NFT, which was previously as popular as DeFi, also performed poorly. A survey by DEXterlab showed that more than 64% of NFT investors said they bought NFTs to "make money." Although most NFT investors said they bought them to make money, most of them have not yet profited from their investments in the field. According to the report, about 58% of NFT investors have not yet profited from the field.

New highs in inflation affect crypto prices

Data showed that US inflation hit a 40-year high, and cryptocurrencies as a whole fell more broadly. Ethereum fell 5% to its lowest level since March 2021, and Bitcoin fell below $26,000, hitting a low in more than a year. US inflation data exceeded expectations, dashing hopes that price increases may have peaked.

According to analysis, even though the Fed has already "actually announced" a 50 basis point rate hike in June, Fed Chairman Powell may still send an unexpected hawkish signal in the early hours of next Thursday. The May CPI data reinforced the market's expectation that the Fed will continue to raise interest rates by 50 basis points by September. Some investors even bet that if inflationary pressures do not cool down, the Fed may raise interest rates by 75 basis points.

Vijay Ayyar, vice president of corporate development and international at cryptocurrency trading platform Luno, said that the current bearish sentiment may continue until next week. Looking back at the previous bear market, Bitcoin usually fell by more than 80%, and altcoins usually fell by more than 90%. If the situation continues, the price of Bitcoin will be much lower in the next one or two months.

Speaking at the Consensus 2022 conference, FTX CEO and founder SBF said that the high interest rate expectations caused by high inflation triggered the decline of the crypto market and the stock market. This does not necessarily mean that the crypto market has entered winter. Now is a good time to build excellent products and improve regulatory clarity. What we need is a truly good product, not just because it is based on crypto technology.

Future winners may be institutions

In the face of the decline, many people believe that crypto assets should not be risked. CNBC host Jim Cramer said that he firmly believes in the value of digital assets BTC and ETH, but at the same time warned investors not to take risks. According to a recent report by CNBC Make It, although Cramer is a believer in BTC and ETH, he said that crypto assets are highly speculative and should not account for more than 5% of a trader's portfolio. Traders should not borrow money to invest in crypto assets.

In addition, Edward Snowden spoke about encryption and internet privacy at the Consensus 2022 conference in Austin, Texas. Edward Snowden believes that the use of cryptocurrencies is more valuable, but he discourages people from putting money into cryptocurrencies as an investment.

However, despite the downturn in the crypto market and the increase in investor losses, this does not seem to pose a threat to institutions. According to the fourth annual Global Crypto Hedge Fund Report by PricewaterhouseCoopers (PwC), 89 hedge funds participated in a survey conducted in the first quarter of 2022. The study showed that 38% of traditional hedge funds have already invested in cryptocurrencies, up from 21% a year ago. In addition, two-thirds of the surveyed entities currently investing in digital assets hope to increase their allocations by the end of 2022. Traditional hedge fund managers who do not participate in such investments fell from 79% last year to 62%. At the same time, 29% of those who have not purchased digital assets are either developing investment plans or are in the late stages of their investment plans. On the other hand, the PwC report pointed out that the estimated number of professional crypto hedge funds worldwide is 300, adding that new entities have been created at an accelerated rate in the past two years. The digital asset with the largest trading volume of crypto hedge funds is Bitcoin, followed by Ethereum.

Benjamin Cowen, a well-known cryptocurrency analyst, also expressed confidence in the future of cryptocurrencies. He commented on his expectations for the performance of cryptocurrencies in the current bear market. The bear market will maximize the value of BTC for most investors. Cown also believes that the current BTC market capitalization of around 45.6% will increase to 60% later this year.