The cryptocurrency market has suffered another “chaotic” 24 hour period, with $200 billion wiped off the market overnight.
The cryptocurrency market has suffered another brutal day, losing over $200 billion in value over the past 24 hours with major coins copping the worst of the crash.
Bitcoin and Ethereum, the world’s two most-traded digital assets, went into another freefall on Wednesday, with smaller coins BNB, Solana, Cardano and XRP also suffering significant losses.
Bitcoin’s price crashed almost 10 per cent over the last 24 hours, dropping to under $54,000 (AUD) for the first time in well over six months.
The price of ethereum, BNB, solana, cardano and XRP also experienced significant drops of between 7 to 11 per cent in the last 24 hours.
Still in its relative infancy, the cryptocurrency market has faced similar tumultuous periods where large chunks of value disappear overnight.
Experts in the field believe values have dropped as a result of the US Federal Reserve raising rates in 2022, alongside heightened pressure from China and Russia to stifle digital currency trading within their borders.
The Chinese government’s widespread crypto ban in 2021 saw the country expel those who use high-powered computers to mine new coin. The result sent bitcoin and crypto prices spiralling, with the downward trend continuing steadily in the first few weeks of 2022.
“I think the main reason for this is the market being spooked by the Federal Reserve raising rates this year, but when the stock market sees some relief, I expect a strong squeeze to the upside for bitcoin and the whole market,” analyst at UK-based broker GlobalBlock Marcus Sotiriou wrote this year.
The wild west nature of the crypto sphere has attracted millions of new investors buying in over the past 12 months. A brief period in early 2022 saw Bitcoin break new ground, soaring to over $80,000 AUD per coin after Elon Musk’s persistent endorsement of the revolutionary technology.
CEO and Co-founder of Mudrex Edul Patel says the current dive-bomb, which he believes has come from a lack of demand amid soaring inflation in the West, has left casual investors in a state of panic.
“The downward trend is likely to put investors in a chaotic situation. The fall of significant cryptos can be attributed to lower demand, inflation, and seasonality. The coming week would be vital for the crypto spectrum,” he told the Economic Times.
In Russia, life is about to get a lot harder for those deep in the crypto sphere, with the government making serious moves against what has become a $7 billion yearly market in the country of 143 million.
According to a report released by the country’s central bank on Thursday local time, cryptocurrency mining and trading goes against Russia’s green agenda and can be used in money laundering or to finance terrorism.
Cryptocurrency has a lot in common with a pyramid scheme, according to the bank, which also called for crypto rule breakers to face the full penalty of the law.
Although the bank’s suggestion to clamp down on cryptocurrency is just that — a suggestion — Russia appears to be fast-tracking parliamentary sessions so that a potential ban could come into effect as soon as possible.
Speaker of the lower house of parliament Vyacheslav Volodin revealed this week that politicians were creating a regulatory framework on cryptocurrency that will be ready in time for the Russian parliament’s spring session.
Under the proposal, cryptocurrency wouldn’t be able to be created, mined or traded on Russian soil — including blocking customers from using crypto exchange platforms.
Russians with offshore accounts would still be able to trade cryptocurrency.
If Russia’s proposal to go ahead, it would be a major blow to the cryptocurrency market around the world.
Russian citizens make up the third-largest number of crypto miners, behind the US and Kazakhstan.
Blockchain miners have made the most of Russia’s unique resources to maximise their mining, with people flocking to the country’s north and Siberia to mine blockchain, because power is cheap over there.
“Potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including in Russia,” the central bank said.
But according to the research team at CoinCDX, India’s largest crypto trading platform, digital assets have endured years of similar suppression from world governments, tipping the decentralised currencies to rise again in the future.
“As Russia-one of the largest crypto adopters in the world-announced its plans for a blanket ban on crypto, the digital asset market plunged back into the reds. BTC and ETH took sharp dips, dropping 2.54% and 3.62% respectively over the past 24 hours,” CoinCDX said in a statement.
“Other altcoins from BNB, ADA, and SOL also nosedived with yet another economic powerhouse taking a hard stance against crypto.
“While this may be a cause for concern, the crypto industry has weathered through multiple bans, restrictions and regulatory scrutiny over the years but have stood the test of time.
“Looking back at how the sector bounced back shortly after China’s crypto ban, we can expect the sell-off to have little long-term impact on crypto’s performance besides this brief initial dip.”