You don’t need us to tell you yesterday was a gruesome day for crypto traders.
In the morning, the market had already shed more than $300 billion in value, and the rout continued long into the night.
The global market cap slid to lows of $1.3 trillion at its lowest point, shaving off another $100 billion. But things appear to be bouncing back. At the time of writing, market cap is back up to $1.5 trillion and the top 20 largest cryptocurrencies are nearly all in the green.
has clawed back nearly 7% in value over the last 24 hours, helped by the announcement that payments company Square had bought another $170 million worth of the currency.
Bitcoin would do well to court new investors. A report from investment firm Wedbush suggested that the fate of Elon Musk, and by association Tesla is now intertwined with that of Bitcoin after the CEO had been so bullish on BTC, and his company had bought $1.5 billion of the cryptocurrency.
Tesla’s stock price fell by another 5% yesterday, topping off a 20% decline in its stock price in less than a week.
Things are looking brighter still for the likes of , up 13.2%, Binance up 28% and every other project bar stablecoins showing double digit gains in the past 24 hours.
Speaking of stablecoins, ’s price slid by a sizeable 2.8% yesterday after the New York Attorney General told the project and its sister company Bitfinex to stop trading in the state and fined it $18 million.
While it’s been heralded as a positive step for the industry at large, it highlights that regulators may still have a few more surprises up their sleeves.
Tech stocks continue to suffer as traders see growth elsewhere
The Dow closed a smidge up at 0.04% as did the S&P 500 with 0.13% gains, but the tech heavy Nasdaq continued its blood letting closing down 0.50%.
Earlier in the day’s trading the situation looked much worse with markets in early trading down by as much as 5% in some cases.
The improved performance later in the day came thanks to Fed Chair Jay Powell’s comments that the increasing bond yields were a sign of optimism rather than worries about an overheating economy.
But there may be still some turbulence left to come, especially for tech stocks. The reason? Value versus growth.
Growth stocks are companies with potential to outperform the overall market because of their future potential. Value stocks are businesses trading below what they are really worth and could provide superior returns.
Over the past 12 months, money has moved into growth stocks, which have tended to be companies that avoided the COVID crunch, i.e. tech stocks.
But that’s left a lot of companies in the value section of the stock market - those companies with good fundamentals (especially in the recovery ahead) but a ticket price that’s undervalued.
Investors are looking at small cap companies that have been buffeted by COVID but with the recovery of the economy this year, could represent for beady eyed investors.
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