According to Bitpanda‘s data, last week’s crypto market crash was the biggest daily drop ever.
In fact, in just under 24 hours, the total market capitalization of all cryptocurrencies was reduced by almost €300 billion. This generated the largest daily red candle in history, and caused the largest weekly drop ever seen in this market.
In addition, many tokens, including large-capitalization tokens, fell by around 40% during the day on 19 May, with the sell-off resuming over the weekend, resulting in major cryptocurrencies plummeting from 50% to 80% in seven days.
At this point, Bitpanda’s analysts say it is necessary to ask whether bitcoin can still be considered a safe haven asset, or a store of value, given that its value can drop by as much as 50% in such a short period.
Crypto market crash: an exception?
Nevertheless, it is worth noting that the lowest price BTC has reached in recent days was $30,700 on Wednesday 19 May, a level 47% below the daily high of seven days earlier, but the price then recovered 23% over the next seven days. Therefore, the 19 May crash was a short-lived episode of high volatility that should be considered an exception. In any case, right now the price is still 34% lower than it was a fortnight ago.
Bitpanda analysts also point out that bitcoin is losing dominance, down to 41%, which is the lowest level since June 2018. At the beginning of 2021, it was at 63%, so in the last five months, it has fallen quite a bit.
According to Bitpanda, the high energy consumption makes Bitcoin vulnerable to declining demand as a store of value, compared to other cryptocurrencies, and for now, it may still be too early to compete with gold for demand as a safe haven asset. However, these two assets could co-exist in the future.
Instead, alternative currencies such as Ethereum are gaining momentum, so much so that the price of ETH and its trading volumes are increasing. The world’s second-largest cryptocurrency is also closing the gap with bitcoin in terms of market capitalization, as it has risen to around €335 billion, compared to bitcoin’s €620 billion.
Most altcoins have also seen their prices rebound after last week’s correction, with LINK being one of the best performing tokens as it has regained more than half of its value, and is now trading above €25.