Between November 8 and November 10, the global crypto market cap fell by 24%, hitting a low of $770 billion. However, a sharp 16% recovery came after the initial panic subsided and forced future contract liquidations to stop pressuring asset prices.
During the heat of 2022's crypto bear market, the global crypto market cap has already experienced dips below the $850 billion line, with something like this also happening in June and July. However, the $770 billion intraday bottom on November 9 was the lowest the global crypto market cap has seen since December 2020, even though the support showed strength in both situations.
The 17.6% drop in this metric was primarily due to the crashes in Bitcoin and Ethereum's prices. Despite the two largest cryptocurrencies dipping by double-digit percentages over the last two weeks, the altcoins were the most affected.
Eight of the top 100 altcoins witnessed dips of over 30% in magnitude, most of which were FTX-related cryptocurrencies. Some of them include Solana, that more than halved from $39 to less than $15, and Aptos, which dropped by 33%.
However, despite the devastation that has swept through the market, according to a tweet from Investor and entrepreneur Anthony Pompliano, people still underestimate how much damage has been done to altcoins throughout the week.
According to Pompliano in the tweet, based on conversations he'd had with other people over the last week, People vastly underestimate how much institutional interest in bitcoin and the larger crypto ecosystem has suffered.
He further says that despite the dip and the severe damage that bitcoin and several other altcoins have taken, "Bitcoin will not only survive but will thrive."
He goes further to pen down some of his thoughts in a blog post, in which he says that Finance is a confidence game. Pompliano says so because everyone has to believe that the system works and that all players involved are held to the same standard.
He says that central banks have understood this "confidence game" for years and that the private banks work tirelessly to uphold this confidence. According to Pompliano, trust is why bankers wear suits and ties.
We have also observed a decline in confidence in the cryptocurrency sector, Pompliano says. The most recent instance, he says, was FTX.
The incident with FTX crypto led to withdrawal requests totalling billions of dollars. Some users successfully withdrew their funds, while others were delayed, causing FTX to halt withdrawals. As a result, businesses have few options after the bank run begins.
What happens if an industry begins to lose the confidence game? He asks.
Initially, the only "crypto industry" was the "bitcoin industry," he opined. Then, as more sophisticated players joined, a sense of respectability grew along with the market.
However, he says most of it meant absolutely nothing.
Everyone runs back to bitcoin when the crypto market's confidence game goes up in flames because bitcoin proves that confidence.
Bitcoin emerges amid our darkest hour, Pompliano says. It offers the answer. The confidence problem is resolved because bitcoin allows everybody to safeguard their purchasing power over the years. And despite the price of the flagship cryptocurrency being at a low along with the rest of the market, the fundamentals of bitcoin are still solid.
Bitcoin does not care, he concludes. So Bitcoin is winning the confidence game, and we must remember why we are here.
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