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Highlights
- The cryptocurrency market lost its valuation by US$130 billion in the last 24 hours.
- Bitcoin (BTC) and Ethereum (ETH) plunged over 50% from their all-time highs.
- Both the cryptocurrencies dropped to their lowest levels since July 2021.
The global cryptocurrency market wiped off US$130 billion of its value in the past 24 hours after leading digital assets, such as Bitcoin (BTC) and Ethereum (ETH), saw a massive sell-off.
The market shrunk 5.16% to US$1.55 trillion on Monday, according to CoinMarketCap.com.
Bitcoin (BTC) fell 3.05% to US$34,296.28, while Ethereum shed 6.85% to US$2,275.93 at 11:21 am ET on Monday. Both the cryptocurrencies slipped to their lowest levels since July 2021 while declining over 50% from their record highs.
Also Read: Falling prices stoke a winter of discontent for the crypto market
Bitcoin had reached an all-time high of US$68,789.63 on November 10, 2021, while Ethereum climbed to its all-time high of US$4,891.70 on November 16, 2021.
The crypto market is moving in tandem with the stock market, which has been declining since the start of 2022. The stock market saw its worst weekly performance last week since March 2020. Investors could be taking a strategic pause ahead of the Fed’s likely interest rate hikes.
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Some analysts predict that Bitcoin might fall to as much as US$30,000, given the current trends.
While some investors still hope that Bitcoin investments could prove effective against inflation, it may not be the case for new investors who may find it an unattractive proposition, they said.
Last year, Bitcoin had drawn massive interests from the institutional investors, triggering a price rally. Many short-term investors had also taken the bet as its prices soared.
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Bottomline
Despite the strong headwinds, analysts believe the market will recover its losses once the current uncertainties over the Omicron impact and the economic recovery disappear.
In addition to that, the investors are also anticipating the effect of further regulations on digital currencies. For instance, the central bank of Russia has proposed a ban on the use and mining of cryptos in the prior week.
