O bitcoin fell below US$90,000 this Monday (1st), a reflection of risk aversion, increasing losses after recording the biggest monthly drop in November since mid-2021.
The largest cryptocurrency in the world reached a low of US$84,808.54 (-6.99%). Around 10:10 am (Brasília time), it fell 5.73%, to US$85,959.10.
In November, the value of bitcoin lost more than $18,000, with a record outflow of money from the market, representing the biggest dollar loss since May 2021, when several cryptocurrencies collapsed.
risk indicator
Due to a relatively short lifespan, there are not many seasonal factors that guide investors’ expectations about typical market behavior. bitcoin in December.
Analysts stated that, at the moment, the strong correlation between the bitcoin and the stock market may be even more relevant.
“O bitcoin tends to be a leading indicator of overall risk sentiment right now, and its decline does not bode well for stocks early this month,” said XTB research director Kathleen Brooks in a note.
“There is no obvious determining factor (this Monday, 1st). However, the sharp drop in volatility last week, with the VIX falling below the average of the last 12 months, may have left some investors apprehensive about the uncertain outlook for the end of the year”, he added.
Futures contracts for bitcoin of the CME also show growing pessimism.
Futures contracts for bitcoin expiring in three months are being traded at the lowest premium compared to those expiring this month in at least a year, which reflects investors’ lower willingness to bet on a sustained rise in price over time.
Ether was quoted at US$2,828.59, down 6.4% after losing around 22% of its value in November.
Negative factors
Jefferies strategist Mohit Kumar stated that several negative factors related to cryptocurrencies are increasing pressure on the bitcoin this Monday (1st).
Last week, S&P Global downgraded Tether, the world’s largest stablecoin, citing an increase in riskier assets in its reserves and “persistent gaps in information disclosure,” with which Tether said it “strongly disagrees.”
Phong Le, chief executive of Strategy, the largest corporate owner of bitcoins in the world, told the podcast “What Bitcoin Did” on Friday (28) that the company will consider selling the stakes if the “mNAV” metric — the value of the company relative to the value of stakes in bitcoin — fall below 1. This ratio is currently around 1.19, according to the Strategy website.
Considering the sharp drop in Strategy shares over the last year, with a 60% devaluation compared to the 13% drop in bitcoin in the same period, the company is already at risk of being excluded from reference indices, which would worsen the pressure on shares and the “mNAV” indicator.
Index provider MSCI is closing a public consultation this month on the possibility of excluding companies whose digital asset holdings exceed 50% of their total assets from its benchmark indices.
Since reaching a record value of around $4.3 trillion, the cryptocurrency market has lost more than $1 trillion in value, according to CoinGecko.
