As a sell-off wipes $1.5 trillion from the combined Bitcoin, Ethereum, Solana, BNB, Cardano, and XRP prices, a new crypto winter warning dubbed "The 1929 Crash" has been issued.
After a massive crypto price drop that wiped $1.5 trillion from the entire cryptocurrency market—hitting bitcoin, Ethereum, BNB, Solana, Cardano, and XRP hard—a new "crypto winter" could be on the horizon.
The bitcoin price has dropped to levels not seen since July of last year, shedding 20% in the previous week and falling to half of its all-time high of about $70,000.
Ethereum, BNB, Solana, Cardano, and XRP, among the top ten cryptocurrencies, have lost between 20% and 30% of their value in the last week (with Wall Street giant JPMorgan issuing a stark Ethereum price warning).
Analysts are warning that as the massive crypto slump continues, the price of bitcoin and other major cryptocurrencies might fall considerably further, perhaps ushering in a new crypto winter. This prolonged bear market saw most cryptocurrencies lost 90% of their value in 2018.
"The mass marketing of bitcoin reminds us of the activity of stockbrokers in the run-up to the 1929 crash," Paul Jackson, Invesco's global head of asset allocation, wrote in a note this week; Business Insider reported it.
"We think it is not too much of a stretch to imagine bitcoin falling below $30,000 this year."
Over the last year, bitcoin and Ethereum rivals such as BNB, Solana, Cardano, and even the meme-based dogecoin have made tremendous gains.
The combined crypto market peaked at around $3 trillion in November, up from under $500 billion a year earlier.
Climbing thousands of percent as investors bet the cryptocurrencies could see far wider adoption and form the basis of a new, decentralized internet.
Jackson warned the huge bitcoin and crypto price rises over the last year could be seen as a "financial mania" and lead to steep losses as the market returns to normality. "A loss of 45% is experienced in the 12 months after the peak of a typical financial mania," Jackson wrote.
Meanwhile, analysts at investment bank UBS have warned of the looming prospect of Federal Reserve interest rate hikes.
The end of pandemic-era stimulus measures could plunge cryptocurrencies into a crypto winter bear market, as happened in 2018.
UBS also expects regulatory crackdowns on bitcoin and other "high-flying" cryptocurrencies like Ethereum, BNB, Solana, and Cardano. This week, Russia's central bank said it wanted the country to follow China in issuing a blanket ban on cryptocurrency trading.
While using high-powered computers to secure blockchain networks in exchange for new coins.
Russia's central bank said the rapid growth of bitcoin and other cryptocurrencies had been caused by speculative demand and that cryptocurrencies carry characteristics of a pyramid scheme, warning of potential price bubbles in the market.
Wild speculation on cryptocurrencies "inevitably invites closer oversight to guard consumers [and] protect financial stability," the UBS analysts, led by James Malcolm, wrote in a note to clients.
"High-flying stablecoins and [decentralized finance] projects seem almost sure to face bigger setbacks from authorities in the coming months." Source