The cryptocurrency has been battered in a brutal 24-hour period, with Bitcoin in particular losing $14,000 in a span of just 60 minutes.
The cryptocurrency has been battered over a brutal 24-hour period, with some coins recording as fast as 20 percent of their overall value.
AEDT on Friday, the cryptocurrency’s total market capitalization stood at $3.7 trillion, but now speculative coins are only worth $3.1 trillion. About $570 billion was wiped out in a single day.
According to data from CoinDesk, bitcoin, the number one cryptocurrency, is down 16 percent, down $21,400 from its price from the day before.
At one point it lost $14,000 of its value in just 60 minutes.
Several weeks ago, things were very different, as bitcoin hit a new high of $98,000. At its lowest point today it was at $60,000 per token.
Bitcoin is not the only cryptocurrency that has been withdrawn in the past several hours. All other major players, including Ethereum, Binance’s BNB, Solana, Cardano and Ripple’s XRP, are down nearly 10 percent.
And there’s a simple reason for this – rumors are swirling about imminent greater regulations for crypto, leading to a massive global sell-off.
An economic forecaster has predicted that the hands of the crypto market are going to be tied with red tape and believes that the price of bitcoin will soon be only $14,000.
Just ahead of the weekend, well-known investor Louis Navelier warned that the US central bank could begin to “dilute” crypto, which could ruin the market.
“The Fed is easing up, and this should lead to a correction in riskier assets, of which bitcoin is a part,” wrote Mr. Navelier.
“The more the Fed tapers, the more volatility we should see in both stocks and bonds – and yes, bitcoin too.”
He said that he could see bitcoin falling almost to pre-pandemic levels in terms of price, and thought it might stay at that level.
“I would take a decline below $46,000 (200-day moving average) as a yellow flag and a decline below the spring low of $28,500 to be an absolute massive double top, indicating a downside risk.” Points to below $US10,000, which would coincidentally match several 80+ percent declines in its history,” he wrote.
This news sent the market into free fall.
Bitcoin is now at its lowest level since September.
At the time of writing, bitcoin was trading slightly above its 24-hour low, at $68,000.
While some see this as a temporary blip for bitcoin, crypto enthusiast (and President of El Salvador) Nayb Bukele has made the most of the opportunity.
He announced that he was going to “buy the dip” to add to his country’s reserve. El Salvador was the first country to convert bitcoin into legal tender.
The crypto market is famously volatile and late last month, the Reserve Bank of Australia warned crypto investors that they risk holding speculative assets with “niche” uses that could lose most of their value.
The RBA’s head of payments, Tony Richards, said the value of many cryptocurrencies was driven by “fads and fear of missing out” and could crash when central banks decide to exercise control over their monetary systems.
“I think there are plausible scenarios where multiple factors can come together to challenge the current enthusiasm for cryptocurrencies, so that the current speculative demand reversal, and much of the price increase in recent years may be unwanted,” he said. told the Australian Corporate Treasury Association in November.