Key Insights:
- Only 11% of Crypto Investors Left the crypto market against the expected number.
- Bitcoin and Ethereum experienced a 70% dip in market capitalization
- The stablecoin experienced an 11% dip in market value
- Experts believe the great crypto dip is a result of lacking liquidity
One will expect that a large number of crypto investors will leave the crypto market because of the bearish state of the market. The bearish state of the market has caused a massive dip in the prices of cryptocurrencies – Bitcoin and Altcoins. Hence, making investors lose huge sums of money.
The natural response should be that investors will leave the crypto market to invest in other potential sectors. However, this is not the case, as only a few have left the crypto space. In fact, fewer than the expected number of investors left after the 70% capitalization plunge on Ethereum and bitcoin. Whereas the expected number of investors to leave the crypto space are 70%.
The popular way of calculating the number of investors that will leave the crypto space is by looking at market capitalization.
Everyone is talking about bearish things, but most of them haven't left the crypto market. They're just waiting for the bottom.#Bitcoin marketcap decreased by -70% from the top while stablecoin went down by just -11%. pic.twitter.com/dhgDzi9g2A
— Ki Young Ju (@ki_young_ju) June 30, 2022
The market capitalization of a cryptocurrency is its total value in the crypto market. It is often the multiplication of the number of coins in circulation by their value. The market capitalization of a coin is effective in calculating the potentiality of a coin to survive the crypto market or not. It is also used to check the recovery ability and the chances of a coin hitting lower bottoms.
However, although market capitalization can be used to tell the number of investors that leave a crypto space, it cannot accurately tell the number of investors that left Bitcoin and Ethereum spaces.
Therefore, another method must be used to determine the number of investors that leave a space. In this case, the capitalization of stablecoins.
In the case of stablecoins, there was an 11% dive in the market capitalization, which is lower than crypto analysts envisaged.
Analysts believe that the ability of several cryptocurrencies to have withstood this great dip caused by a lack of liquidity is highly commendable. But it doesn’t negate the fact that it resulted from lacking liquidity.
Some experts believed that if bitcoin and Ethereum plunged, users would move their money out of these spaces but not out of the digital space. They believed users might return the funds into bitcoin and Ethereum after the market normalizes. However, this is not the case, as bitcoin has failed to hold above $20,000 to break local resistance.
