The COVID-19 pandemic has helped bitcoin to integrate more into the mainstream, as institutional and individual investors have become involved in the cryptocurrency market and associated projects. Now that the Federal Reserve is more hawkish, riskier assets like stocks and digital assets have suffered. The Bloomberg Galaxy Crypto Index, which measures a number of the largest cryptocurrencies, has lost nearly 10% as of Friday since the start of the year.
According to Eric Irvin, chief executive of Blockforce Capital, declines across asset classes may be just the beginnings of a “mini-bear market”. New investors may withdraw so that the long-term asset holders are the primary owners.
“It’s heartbreaking and nerve-wracking for any investor who looks forward to it, especially if it comes from the traditional stock market,” he added, adding, “It’s completely normal for this digital asset class.”
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Bitcoin and other cryptocurrencies are notorious for their volatility, as they are known to broadcast huge up and down swings, sometimes within minutes.
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