By Marcus Soterio, analyst UK based digital asset broker GlobalBlock
Bitcoin briefly fell below $20,000 this morning, with the overall crypto market cap falling below $900 billion from a $3 trillion peak last year. A new report from Glassnode Insights says the current bear market is “a bear market of historical proportions” and says that “2022 could be reasonably argued to be the most significant bear market in digital asset history.”
Glassnode data such as the market price and realized value oscillator (MVRV, the ratio between market price and realized value) gives us insight into how this bear market compares to past bear markets. With MVRV, we can see the relative monthly capital flows into Bitcoin. As this indicator reaches -2.73 standard deviation (SD) from the mean, we can see that Bitcoin is currently experiencing the largest capital outflow event in history.
As mentioned earlier, the industry needs regulatory clarity to tap into the next wave of institutional money. British MP Matt Hancock has called for “liberal” crypto regulation, saying no country can stop the crypto revolution. Hancock said, “I hate the idea of regulators telling people what they can and can’t do with their money. Hancock touches on the Terra fiasco as an example of “the maturity of the market” and highlights how there are stable coins with less risk. His claims are consistent with the idea that the UK has the power to decide whether the “crypto revolution” starts elsewhere in the UK.
I agree with Hancock’s line of thinking and that we should compare this time in the crypto space to the internet in 2001 – despite the dot com bubble busting in 2001, the internet has never been judged by technology.