Fakoyejo Olalekan
Investors are currently not seeing bitcoin as a safe haven for their funds, despite inflation ripping through Nigeria, United States and other countries, on the back of the ongoing war between Russia and Ukraine.
Bitcoin’s dip comes as a shock considering in the past few years, most especially since COVID-19 outbreak, the market has been used by investors to hedge inflation, which is 16.82% in Nigeria as of April, while that of the U.S is 8.6% in May, highest in 40 years.
Join our WhatsApp ChannelBTC crashed below $25,000 within the last 12 hours, settling at $24,900, before elevating back to above $25,200. However, the cryptoasset has depreciated by -46.2% year-to-date, losing $21,411.74 in value within six months.
In contrast, during the same period in 2021, bitcoin had appreciated by 41.5%, gaining $20,688.97, almost what it lost this year, as the price surge from $28,994.01 to $49,682.98 within six months.
The movement of bitcoin within H1 last year and 2022 reflects investors declining confidence in the digital currency, with fear griping BTC community of further fall in the asset, and discouraging demand among prospective buyers or hold positions.
Between January to date, bitcoin investors have lost $384.7 billion, following the market capitalisation dwindling to $483.6 billion, as at the time of filing this report, losing about half of the $868.3 billion held earlier this year.
While investors are exiting from bitcoin market and resisting hedging inflation through the cryptocurrency, the stock market in U.S, as well as Nigeria have also been seeing less investor participation in recent weeks, and this is expected to continue
Investment into the Nigerian capital market dip -90.6% last week, mirroring the depreciation in the bitcoin market, reflecting investors are holding onto their cash amid fears of further decline across investment options available to hedge inflation.
