Bitcoin Struggles near $800 Billion Market Cap
Since the start of 2022, the crypto market cap has been shrinking. Bitcoin is leading the latest market dump. The crypto asset lost nearly 20% of its value in the last 10 days as its market cap dipped below $800 billion.
Bitcoin is not the only digital asset facing a market correction these days. Ethereum’s performance is even worst. ETH plunged heavily over the weekend and reached a low of $3,035 on Saturday. The digital asset has lost almost a quarter of its value since the start of 2022.
Crypto analysts across the market called the correction a natural portfolio adjustment after a substantial bullish rally in 2021. However, some short-term investors are worried about Bitcoin’s lackluster network activity this year.
“With one week of 2022 in the books, crypto market caps have been shrinking quite rapidly. Whale behaviors and on-chain fundamentals haven’t been looking so hot. But during these times, it’s often easy to forget that social sentiment plays a major role in how and when things will turn around,” Santiment noted in its report.
Bitcoin and Institutions
2021 was a remarkable year for Bitcoin in terms of institutional adoption. With technology giants like Tesla announcing multi-billion dollar investment in the crypto asset, existing BTC holders increased their crypto holdings. In 2022, leading crypto investors are optimistic about the wider adoption of Bitcoin. In a discussion with CNBC last week, Mike Novogratz, CEO of Galaxy Digital, said that many institutions are planning to add Bitcoin to their balance sheets.
“We see a tremendous amount of institutional demand on the sidelines. I’m not nervous in the medium-term. I know big institutions that are going through their process to put positions on. They’re going to see those as attractive levels to buy. On the charts, $38,000, $40,000 feel like where we should bottom,” Novogratz explained.