Bitcoin is on track for its longest losing streak of 2024. As of May 9, 2024, Bitcoin saw a minor decline, continuing its downward trend from mid-March when it hit an all-time high of $73,798. According to CoinMarketCap, Bitcoin's price has since entered a two-month period of volatility, currently hovering around $61,000.
While cryptocurrencies are known for their extreme volatility, Bitcoin hadn’t experienced four or more consecutive days of decline this year until now. The last five-day losing streak occurred in October 2023, while the previous four-day drop was in November 2023. With Bitcoin’s slight dip on May 9, it may set a new record for the longest losing streak this year. Meanwhile, CoinGecko reports that the total cryptocurrency market capitalization has shed over $500 billion (approximately ¥3.61 trillion) since its March peak.
$3.6 Trillion Lost in Two Months: Crypto ETF Demand Weakens
CoinGecko data reveals that the crypto market’s total capitalization neared $3 trillion in March. However, as Bitcoin’s price continued to decline, the market lost over 17% of its value in two months, shrinking by more than $3.6 trillion.
Earlier this year, the U.S. SEC approved 11 spot Bitcoin ETFs, including products from BlackRock, ARK Invest, Fidelity, and other major asset managers. These ETFs initially drove substantial trading volume and capital inflows into Bitcoin. However, Grayscale’s Bitcoin holdings plummeted by 41.2%, from 496,600 BTC in late January to 291,800 BTC today.
Analysts note that weakening inflows into U.S. Bitcoin ETFs, combined with expectations of prolonged high interest rates from the Fed, have dampened digital asset growth. Even the debut of Hong Kong’s crypto ETFs failed to boost market sentiment. April marked the first net outflows for Bitcoin spot ETFs (~$170 million), while trading volumes steadily declined from mid-April. The T3 Bitcoin Volatility Index and Ethereum’s equivalent metrics also hover near two-month lows.
Benjamin Sellemaejer, Director at Magnet Capital, remarked, "Many speculators betting on sustained ETF-driven momentum have now exited the market."
Bitcoin’s Dominance Rises Despite Market Downturn
Interestingly, while Bitcoin and the broader crypto market lost value, Bitcoin’s market share increased. As the largest crypto asset, Bitcoin’s price movements heavily influence the rest of the market. Since March, Bitcoin has dropped over 17%, whereas decentralized finance (DeFi) and gaming sectors fell by 26.9% and even steeper percentages, respectively.
👉 Why is Bitcoin’s dominance growing amid a bear market?
Visa Casts Doubt on Stablecoin Adoption
Stablecoins—cryptocurrencies pegged to stable assets like the U.S. dollar—are designed to minimize volatility. However, a recent Visa and Allium Labs report revealed that over 90% of stablecoin trading volume comes from inorganic activity (e.g., bots and large traders), not real users.
In April, just $149 billion of $2.2 trillion in total stablecoin transactions stemmed from genuine payments. This challenges proponents who argue stablecoins could revolutionize payments. Companies like PayPal and Stripe have ventured into stablecoins, with PayPal launching PYUSD and Stripe enabling merchants to accept stablecoins for transactions.
Pranav Sood of Airwallex commented, "Stablecoins are still in their infancy as payment tools and lack short-to-mid-term competitiveness." Despite projections that stablecoins could reach $2.8 trillion by 2028, adoption remains sluggish due to technical and trust barriers.
👉 Will stablecoins ever replace traditional payments?
FAQs
1. Why is Bitcoin’s price dropping in 2024?
- Bitcoin’s decline follows reduced ETF demand, high Fed rates, and broader market corrections after its March peak.
2. How does Bitcoin’s performance affect altcoins?
- Altcoins (e.g., DeFi, gaming tokens) often fall harder than Bitcoin during downturns due to lower liquidity and higher risk.
3. Are stablecoins failing as payment solutions?
- Current data suggests most stablecoin volume isn’t organic, but long-term potential remains if adoption improves.
4. What’s driving Bitcoin’s rising market dominance?
- Investors may flock to Bitcoin as a "safe haven" during crypto bear markets, increasing its share of total market cap.
5. Will crypto ETFs recover?
- ETF flows depend on macroeconomic conditions and institutional interest, which could rebound if rate cuts occur.
6. How does Visa’s report impact stablecoins?
- It highlights that real-world usage is minimal, potentially slowing mainstream acceptance until usability improves.