Rising uncertainty is hitting the cryptocurrency market. Photo / Getty Images
The cryptocurrency has been hit in a brutal 24-hour period, with some coins seeing drops as sharp as 20 percent of their total value.
On Friday AEDT, the overall market capitalization of the cryptocurrency stood at A $ 3.7 trillion, but now speculative currencies are worth only A $ 3.1 trillion in total. Approximately A $ 570 billion was phased out in a single day.
Bitcoin, the number one cryptocurrency, is down a whopping 16 percent, shedding A $ 21,400 from its price since the day before, according to figures from CoinDesk.
At one point, it lost A $ 14,000 of its value in just 60 minutes.
Several weeks ago things were very different as bitcoin rose to a new all-time high of $ 98,000. At its lowest point today, it was at A $ 60,000 per token.
Bitcoin is not the only crypto that has been gutted in the last few hours. All the other major players, including ethereum, Binance's BNB, solana, cardano, and Ripple's XRP, have seen drops of around 10 percent.
And there's a simple reason why: Rumors are emerging of impending major regulations for cryptocurrencies, prompting a worldwide sell-off.
An economic forecaster has predicted that the cryptocurrency market is on the verge of being tied down by red tape and estimates that bitcoins will soon only be worth AU $ 14,000 each.
Just before the weekend, well-known investor Louis Navellier warned that the US central bank could start to "downsize" cryptocurrencies, which could ruin the market.
"I would consider a decline below $ 46,000 (the 200-day moving average) to be a yellow flag and a decline below the spring low of $ 28,500 to be a completed massive double top, pointing to a decline by below $ 10,000, which by the way would coincide with many of the multiple 80% drops in its historical history, "he wrote.
The news sent the market into a free fall.
Bitcoin is now the lowest since September.
At the time of writing, bitcoin was slightly above its 24-hour low at A $ 68,000.
However, some see this as a temporary problem for bitcoin, and crypto enthusiast (and President of El Salvador) Nayib Bukele makes the most of the opportunity.
He announced that he was going to "buy the dip" to add to his nation's reserve. El Salvador was the first country to convert bitcoin into legal tender.
The cryptocurrency market is notorious for its volatility, and late last month the Reserve Bank of Australia warned crypto investors that they risked holding speculative assets with 'specialized' uses that they could lose most of its value.
RBA payments chief Tony Richards said the value of many cryptocurrencies had been driven by "fads and fear of missing out" and could collapse when central banks decide to assert control over their monetary systems.
"I think there are plausible scenarios where a variety of factors could come together to significantly challenge the current fervor for cryptocurrencies, such that the current speculative demand could begin to reverse and much of the price increases of the past few years could be undone. ", said. he told the Australian Corporate Treasury Association in November.
- News.com.au
