The crypto market capitalization has been declining since the start of 2022. Bitcoin leads the current market crash. The cryptocurrency’s market valuation has dropped below $800 billion in the previous ten days, losing over 20% of its value.
Bitcoin isn’t the only digital asset that’s been hit by a price drop lately. Even worse is Ethereum’s performance. Over the weekend, ETH plummeted, hitting a low of $3,035 on Saturday. Since the start of 2022, the digital asset value has dropped by over a quarter.
After a significant bullish surge in 2021, crypto experts characterized the fall as a normal portfolio adjustment. On the other hand, short-term investors are concerned about Bitcoin’s low network activity this year.
“With one week of 2022 in the books, crypto market caps have been shrinking quite rapidly. Whale behavior and on-chain fundamentals haven’t been looking so hot. But, during these times, it’s often easy to forget that social sentiment plays a major role in how and when things will turn around,” according to Santiment’s analysis.
Institutions & Bitcoin
In terms of institutional adoption, 2021 was a spectacular year for Bitcoin. Existing Bitcoin investors upped their crypto holdings after technological titans like Tesla announced multi-billion dollar investments in the cryptocurrency. In addition, leading cryptocurrency investors believe that Bitcoin will be widely adopted by 2022. According to Mike Novogratz, CEO of Galaxy Digital, many institutions are preparing to incorporate Bitcoin into their balance sheets in a recent interview with CNBC.
On the sidelines, we see a lot of institutional interest. But, in the medium-term, I’m not worried. Large organizations are going through the hiring process. Those are going to be appealing levels for them to purchase. According to the charts, we should bottom out about $38,000 to $40,000, Novogratz added.