The cryptocurrency market tumbled by over 3% on Friday continuing on the crash the market is currently going through. The fall comes after a year of gains and record highs, following changes in many factors from its increase in market cap to the effects of the COVID-19 pandemic. Cryptocurrency investors are now selling off their digital assets after the market plunged yet again.
The market capitalisation of the global market cap on Friday stood at $2.32 trillion with almost all major cryptocurrencies witnessing a drop in value. Market leaders Bitcoin registered a 2.66% fall in the last 24 hours to trade at $46,566.02 per unit till the last update. Another major digital currency, Ethereum saw its value dip 1.66% in the last 24 hours and was trading at $3,894.88 per unit. Tokens like Solana, Cardano, Litecoin and Dogecoin all saw their values drop in the recent days signalling a market crash.
Why is the crypto market down today?
Earlier, Bitcoin and other leading crypto coins witnessed a major drop in price after investors began dumping mining equipment following China’s crackdown on the cryptocurrency. The Chinese government announced fresh regulations and banned mining in its Sichuan province. China’s crackdown on mining of the token began a chain effect that caused the value of the market to drop. Meanwhile, Chinese banks were also advised to pull support of crypto transactions completely.
Governments around the world proposing to ban cryptocurrencies leaving some exceptions could have created a state of panic among investors. The Indian government’s public statements regarding the banning of private cryptocurrencies in India as well as it teasing the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 to be presented in the parliament have also affected the market in a major way. Finance Minister Nirmala Sitaraman cleared the air as she informed that the government has no plans to consider cryptocurrency as a currency, which caused disruption in the market.
Crypto market crash factors
Another factor that has an impact on the global stock market, as well as the cryptocurrency market is Over the last month, the Indian cryptocurrency market has been experiencing sharp falls. These the arrival of a new variant of the Coronavirus, i.e. Omnicron. Meanwhile, Investors selling their coins and reaping profits ahead of the yearend and the holiday season is yet another minor reason for the value drop.
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