The crypto “Fear and Greed” index is officially issuing a sentiment of ‘extreme fear’ as the ongoing “crypto crash” heightens widespread concerns across the global economy. The recent downturn has seen robust capital outflows from crypto markets, causing havoc in both investment portfolios as well as numerous other asset markets too.
While crypto markets have lost almost $1 trillion in value over a matter of weeks, we explore what caused this dramatic decline and how several utility tokens, including OBT, are remaining bullish notwithstanding the rising FUD.
Let’s Discuss The Crypto Market Crash
In just a week, the net worth of the crypto market has decreased by 24.5%, erasing roughly $300 billion in accumulated value. Dropping below the $1 trillion mark for the first time since February 2021, the valuation is a far cry from its $3 trillion all-time-high in November ‘21.
The immediate cause of the current crash appears to be a mass sell-off by investors following heightened inflation and a decreasing appetite for riskier assets. While the crypto market has been badly affected, the same trend has been afflicting major global capital markets as well
Late last week, the U.S. released data indicating that inflation is hitting a 40-year high. The immediate negative impact of this announcement was on full-display over the weekend as investors rushed to liquidate their crypto assets. On top of inflation concerns, the increasing prices of food, gas, and energy are adding to market pressure.
Bitcoin, currently holding 47% of the crypto market share, is down 23% in just seven days while Ethereum, the second biggest cryptocurrency, lost roughly 15% of its value, trading at lows last witnessed in early 2021. On a similar note, in the last 24 hours Solana (SOL) has dropped 17%, Cardano (ADA) -13%, and Dogecoin (DOGE) -14%.
The Power of Utility Tokens
While most markets remain in the red, there are a few showing signs of gains against the grain.
Market crashes tend to offer a period of rejuvenation to the industry, culling projects with minimal use cases and allowing true utility tokens an opportunity to prove themselves. And this is exactly what we are observing occur with Oobit’s native token, OBT.
The token saw gains of 15% last week, illustrating its resilience to the market crashing around it on all sides. The token is currently used to provide incentives to users of the Oobit ecosystem alongside trading activities. Since launching Oobit Pay, a payment app that allows users to immediately send crypto payments with zero fees, OBT has seen increased trade volume and value, indicative of growing interest in its long-term viability.
As Mathieu Hardy, CDO at OSOM Finance, said: “Utility is the lifeblood of the crypto ecosystem. Without it there’s only speculation.” This reiterates the sentiment that investing in cryptocurrencies with proven utility is the smartest investment choice one can make.
We sat down with Eric Ma, the CEO of Powertech, an asset management solution provider, and crypto services advisor to Oobit, to discuss the recent market crash and why OBT is displaying such resilience.
Other top gainers include the NFT play-to-earn token, FunFi (FNF), the Ethereum-based layer-2 protocol Aventus (AVT) and the Cardano-based decentralized cross-chain NFT marketplace, Verlux (VLT).
What Can We Expect In Coming Weeks?
Experts warn that these choppy conditions are likely to continue in the coming weeks. In the short term, we’re in for more volatility as the markets navigate these new territories. However, experts suggest that in the long term we’re likely going to see prices increase dramatically, as has been the case for all cyclical asset markets in the past.
Until then, seasoned investors are taking advantage of the dip and accumulating these currencies at prices last seen in early 2021.
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