Cryptocurrencies continue to crash after year-long highs and gains

The cryptocurrency market has been experiencing a downfall by over 3% on Friday, continuing the crash that the cryptocurrency market is going through. The fall is being experienced after a year since the gains and records high, as it underwent changes in many aspects from its increase in market cap to the impacts of the Covid-19 pandemic. Besides, investors are selling off their digital assets after the plunge in the market.

On Friday, the global cryptocurrency market capitalisation was at $2.32 trillion with major cryptos undergoing a fall in value. Bitcoin registered a fall of 2.66% in the last 24 hours, trading at $46,566.02 per unit. Additionally, Ethereum saw a dip in value resulting in 1.66% in the last 24 hours, trading at $3,894.88 per unit. Apart from them, the values of Solana, Cardano, Litecoin, and Dogecoin also suffered indicating a recent crash in the crypto market.

Why is the crypto market down today?

Bitcoin and other major cryptos suffered a blow after investors began dumping mining equipment following China’s crackdown on the cryptocurrency. The Chinese government announced regulations and a ban on crypto mining in Sichuan province. China’s crackdown on crypto mining initiated a chain effect that resulted in the drop of the market value. Besides, Chinese banks are also advised to pull support of crypto transactions completely.

Governments all across the world are proposing to ban cryptocurrency, however, leaving some exceptions to create panic among investors. Also, the Indian government’s statement regarding the banning of cryptocurrency in India as well as regulating Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 to be presented in the parliament has effect the drop in market value. Finance Minister Nirmala Sitaraman’s statement that India has no plans to include cryptocurrency as currency affected the market.

Crypto market crash factors

Over the last month, the Indian cryptocurrency market has been experiencing a sharp fall, which resulted in an overall impact on the global stock market. Also, the arrival of the new Coronavirus variant, Omicron has created an effect on the market. Besides, investors are selling their coins and reaping profits before the yearend, and also the holiday season is another minor reason for the crash.