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The prices of major cryptocurrencies, including Bitcoin, Ethereum, BNB, Cardano, XRP, and Solana, have dipped steeply, clearing out about $200 billion from the general cryptocurrency market in less than 24 hours.
Bitcoin has crashed by 10% over the last 24 hours and has dropped beneath $40,000 to about $38,000- it had not been at that price level since 2021 summer of 2021. Ethereum, Solana, BNB XRP, and Cardano all dipped between 7%-11%.
This unexpected sell-off happens as the global stock market sinks further, with Tech’s big weight, Nasdaq slipping into a correction as investors are faced with the reality of a more stringent Federal Reserve policy and high-interest rates.
Ethereum, on its part, has dipped beneath the closely-monitored $3000/eth level, as its closest rivals, Solana, BNB, and Cardano, all dropped sharply after their huge gains over the past year.
The latest cryptocurrency price drop has now caused about a $1.2 trillion loss from the general cryptocurrency market after getting to an all-time high of $3 trillion in November. Bitcoin’s price has dipped by about 50% from its peak value of almost $70000/bitcoin.
There is a continuous general panic in the market as investors have been nervous in recent months over the impending Federal Reserves decisions and other central banks’ reactions to it. At the beginning of the month, there was a market fright at the announcement that Federal officials sponsored the idea of shrinking the bank’s books along with the expected rise in interest rates.
Reports have it that the Federal Reserve is being forced to take actions earlier than expected, and probably more severely, as a result of the soaring inflation that has caused prices to accelerate exponentially.
As prices struggle to remain steady, cryptocurrency funds are recording the fifth week of outflows, according to CoinShare. The report found out that the total outflow at this time for the entire cryptocurrency market hit up to $532 million, the highest outflow since 2008.
Feds and Externals
On Thursday, the Federal Reserves released the anticipated report on a planned Central Bank Digital Currency (CBDC) called Digital Dollar, motivated by bitcoin and other cryptocurrencies that various governments and their central banks around the world have been trying to experiment in recently.
The Federal Reserve report, written by its 7-member board of governors, said that a digital dollar might fundamentally change banking and its relations with the Federal Reserve, with a digital dollar that is capable of serving as a close substitute for fiat money.
However, the recent crash in cryptocurrency prices is also a result of Russia’s plan to follow China’s steps by banning bitcoin and crypto generally. They warn that crypto assets could be a threat to a country’s economic stability, citizens’ welfare, and financial sovereignty.
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