Bitcoin: Larry Fink Fears An Unprecedented Crisis!

Bitcoin is currently experiencing an unprecedented crisis. This strong volatility worries institutional investors. The evidence: some of them are beginning to reassess their exposure to this digital asset. BlackRock CEO Larry Fink even warns of an imminent crash.

Bitcoin is collapsing: a market under pressure

The price of Bitcoin has just dropped below $85,000. This has resulted in a colossal loss of $1 trillion in just one month. This brutal drop of BTC recalls the worst periods of the crypto market, thereby reviving fears of a massive collapse similar to that of 2022. The value of Bitcoin had fallen from $69,000 to $15,000 in one year.

According to experts, this plunge is explained by several factors, including:

• the rise of inflation,
• the strict monetary policy of the FED,
• the weakness of traditional financial markets.

The increasing correlation between BTC and the stock market is also a topic of debate. Once considered a safe haven, the leading cryptocurrency now seems to follow the trends of tech stocks.

Larry Fink warns

BlackRock CEO Larry Fink raises the alarm about the risks posed by the drop in bitcoin prices for the global financial system. During an intervention at the CeraWeek conference, he stated:

The volatility of cryptocurrencies is a major problem. The more they integrate into traditional markets, the more they amplify systemic risks.

In this regard, BlackRock is already revising its strategy regarding its bitcoin ETFs. The decline in institutional enthusiasm could thus harm the growth of these financial products.

Bitcoin drop: Elon Musk adds to the uncertainty

Elon Musk is throwing gasoline on the fire by suggesting that cryptocurrencies could enter a speculative bubble that risks bursting abruptly. This is not the first time the Tesla boss has influenced the crypto market. In 2021, his comments on bitcoin and Dogecoin caused significant price fluctuations.

Some traders interpret his remarks as a warning sign of a broad financial crisis in which bitcoin could suffer more. Others see it as an attempt to manipulate the market. One thing is certain: investors remain cautious in the face of the billionaire’s statements.

According to a recent analysis, the bitcoin derivatives markets are experiencing an explosion of short positions. This concretely means that many traders are betting on further price declines. If this trend continues, a massive liquidation could:

• intensify the price drop,
• lower the market capitalization of the crypto market even further.

The upcoming months are therefore crucial. If institutional investors continue to withdraw from the market, the market capitalization of bitcoin could decrease further. If regulations bring increased stability, however, the flagship crypto asset could rebound. Stay tuned…