FX.co ★ Colossal financial losses: financial giants are leaning towards the optional use of cryptocurrencies

Traders across the globe have suffered losses amounting to $1 billion over the past day. This was the result of a sharp drop in the price of bitcoin, which is now quoted at $46,000. On crypto exchanges around the world, the positions of more than 168,000 trading participants were forcibly closed.

It is also worth noting that in most of the deals, almost 77%, were long, which suggests that the market was determined to increase the price of bitcoin. However, over the past few days, the crypto asset has fallen in price by another 12%. This was facilitated by the negative information agenda, as well as the price correction, which exceeds the expectations of experts and can seriously collapse the quotes of the digital coin.

Last week, analysts at JPMorgan questioned the reliability of Tether stablecoins, and on February 26 they released a study recommending their clients to invest in Bitcoin for no more than 1% of the investment portfolio volume. The bank is confident that the only reason for buying digital assets is its ability to protect the user from inflationary losses of traditional investment assets. In other words, the company's experts are confident that the only function of bitcoin is to stabilize income and eliminate risks in expanded operations with instruments such as commodities, securities, and bonds.

Moreover, JPMorgan is confident that cryptocurrency investment should not be more than 1% to avoid financial losses during sharp jumps in the value of digital assets. Such conclusions were the results of a kind of experiment that was carried out in 2020 when the coronavirus crisis began. Some traders have used Bitcoin as a hedge against fluctuations in more common investment assets. This led to the fact that traders not only saved themselves from inflationary losses but also received a 30% profit from the growth of the first cryptocurrency.

As of February 26, we can say that the potential of the cryptocurrency market is divided into two conditional categories: market participants who are ready to use digital assets locally, within a certain optional benefit, and those who make a long-term bet on the crypto market, invest in the main digital coins and count on their further development. Taking into account the many disadvantages of cryptocurrencies, it is the optional use of crypto assets that do not go beyond the investment risks that are now in high esteem.