Cryptocurrency Crash of August 5: Who Benefited and What Are the Market Prospects
Date: 2024-08-07 Author: Gabriel Deangelo Categories: BUSINESS
On August 5, 2024, the cryptocurrency market experienced its largest drop in capitalization since January 2022. Bitcoin fell by more than 15%, falling below $50,000, while Ethereum recorded its deepest drop since 2021. The main factors that contributed to this collapse were the aggravation of the geopolitical situation in the Middle East and concerns about the state of the global economy.
In a survey conducted among subscribers of crypto channels, about 32% of respondents said that the Bitcoin price level reached on the day of the crash could be the lowest this year. Another 8% of participants are confident in this forecast. In total, about 4.8 thousand people took part in the survey.
The largest number of respondents (35%) believe that the Bitcoin rate has not yet reached its minimum. Another 11% of respondents are sure that Bitcoin may fall even lower.
Investor Behavior in Falling Conditions
In response to the price drop, respondents were divided into two large groups. 31% said that they took advantage of the situation to buy Bitcoin and other cryptocurrencies. 52% of respondents preferred to wait and not take any action. Only 3% of participants reported that they sold their cryptocurrencies.
Most respondents (29%) admitted that they are in the red, but consider their losses acceptable. 23% said that although they are in the black, they could have earned more. Only 13% are satisfied with their results, while the same number of respondents noted significant losses.
Despite the recent collapse, 55% of respondents are confident that Bitcoin will be able to update its price highs of this year. 27% expressed doubts about this, and 9% are sure that the maximum will be updated, and the same number do not think it is possible.
Activity on Prediction Platforms
There is also activity in predictions on the Polymarket crypto platform. Participants have placed more than $ 1 million in bets on whether the price of Ethereum will update its historical maximum in 2024.
On such platforms, known as prediction markets, users bet on the outcome of future events using cryptocurrency. These platforms allow you to determine the market assessment of the probability of an event occurring without the need for a centralized arbitrator, thanks to smart contracts.
The majority of participants (80%) bet that Ethereum will not update its historical maximum, recorded in 2021 at $ 4,891 on the Binance exchange. The probability of reaching this level in the third and fourth quarters of this year is estimated at 8% and 14%, respectively.
The crash on August 5th had a significant impact on the cryptocurrency market, leaving many investors in a difficult situation. However, despite the current difficulties, some respondents and participants of forecast platforms remain optimistic, expecting a recovery and renewal of price highs in the future. In conditions of volatility and uncertainty, it is important to maintain a long-term perspective and closely monitor changes in the market.
