Monday, late at night, the cryptocurrency Bitcoin fell below $30,000 for the first time since Jun. 22 wiping $90 billion from circulation in a span of fewer than 24 hours.
On Tuesday morning, the price for the cryptocurrency was at $29,700, marking a 5.1 percent drop in the 24 hour period mentioned. Along with Bitcoin, other cryptocurrencies have fallen in the last 24 hours as well, including Etherum. Ethereum, the second-largest crypto, fell by 3.4 percent, holding now at $1,745. But it wasn't just the crypto markets that took a dive. The Dow Jones on Monday saw its worst day since October, falling by nearly 700 points. However, the market had corrected, rebounding by 550 points on Tuesday.
Some believe the cause for the drop is due to several circumstances such as fear of the new delta variant and the possibility of future lockdowns. James Athey, an investment manager at Aberdeen Standard Investments, explains, according to Go Banking Rates that "There's no big catalyst, but it's a combination of factors. There are questions about vaccines, we might still get restrictions on consumer behavior, mobility, this is increasingly back in the market's mind. We're also seeing the summer lull. It's very quiet so volumes are lower, liquidity is thinner."
While some believe that market is behaving normally, others are more skeptical. On June 20th two days before cryptocurrency took a dive, Business Insider published an article highlighting Michael Burry's, portrayed in the movie "The Big Short," position on a coming market crash. Burry tweeted posts, which have now been deleted, that investors buying into meme stocks and cryptocurrencies were signing up for massive losses.
"All hype/speculation is doing is drawing in retail before the mother of all crashes," Burry tweeted. "When crypto falls from trillions, or meme stocks fall from tens of billions, #MainStreet losses will approach the size of countries."
Burry added that there was reckless borrowing going on in crypto, tweeting: "The problem with #Crypto, as in most things, is the leverage. If you don't know how much leverage is in crypto, you don't know anything about crypto."
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