Cryptocurrencies have seen a sharp reduction in price for the last couple of days. A very significant price crash which happened on Friday, January 21, 2021, has left some investors in a state of shock and confusion.
The world’s most popular cryptocurrency, Bitcoin, was deeply affected by this crash as data shows that the cryptocurrency fell from its earlier price of $40,500 to $38,000.
Unfortunately, this was just the beginning as the asset is currently trading at around $33,418 at the time of this publication.
This is a new low for Bitcoin after the asset hit an all-time high of $67,566, in November 2021. This crash means that the cryptocurrency has lost 50% of its value since that time.
Other cryptocurrencies were also affected by this crash, most notable among them were NFT-based giants, Ethereum(ETH) and Solana(SOL).
Ethereum fell as low as $2400 during the weekend and has continued to fall. According to CoinMarketCap, the asset is trading at $2,210 on Monday, January 24, 2022.
Binance’s local token (BNB), Cardano (ADA) and Ripple (XRP) were also gravely affected by the unprecedented dip.
According to market data, the market cap of cryptocurrencies has fallen by over 43% from $2.9 trillion to around $1.6 trillion since the last BTC all-time high.
Postulations have been made that the market crash was caused by the Russian central bank’s proposal of a ban on cryptocurrencies and crypto exchanges due to consumer risk, while the British Government announced legislative plans to tackle misleading cryptocurrency adverts.
The Russian central bank released a paper that likened the growth of cryptocurrencies in Russia to “dollarisation”, stating that “cryptoisation limits monetary policy sovereignty, which might force the central bank to permanently maintain a higher key rate to contain inflation.”
It added that “the spread of cryptocurrencies could make people withdraw their savings from the Russian financial sector and, subsequently, decrease its capability to finance the real sector and potential economic growth reducing the number of jobs and potential for household income increase.”
Crypto investors, especially newbies, have been in panic mode over the quick drop in the price of cryptocurrencies. A few of them have referred to crypto as a Ponzi scheme and complained that they’ve lost their money.
Some veterans have urged them to hodl through the dip and not give in to panic selling. Generally, crypto investors are hopeful that the digital assets will increase in value and eventually surpass the previous all-time high.
