Crypto News — Why Did The Crypto Market Crash The Other Day?
Many investors have been wondering why the crypto market crashed today, but there are a couple of reasons it might have happened. One reason is the lack of investment in cryptocurrency by many investors. The other reason is that China increased its crackdown on Bitcoin mining, which contributed to the last crash earlier this year. On Tuesday, the country’s National Development and Reform Commission said it was considering imposing punitive electricity prices on Bitcoin miners. Furthermore, Twitter’s CFO made negative comments on the cryptocurrency market, saying that investing cash in crypto assets at the moment does not make sense.
There are a few reasons why the crypto market crashed today. The first reason is the approaching holiday season. Many investors were trying to get rich before the holiday season. Another reason could be that governments around the world are proposing to ban cryptocurrencies. A third reason could be because the cryptocurrency market is sentiment driven and isn’t regulated. A recent report from CoinDesk has pointed to a new variant of the Corona virus called Omnicron.
Another reason could be because Bitcoin has been experiencing a prolonged bull run. Earlier this week, the total market value of cryptocurrencies rose, but this week it has slowed down dramatically. In the past two weeks, the market has gone from $16 billion to $2.6 trillion. The price of Bitcoin was down by almost 15% on Friday and has remained below $1.07 by the end of the day. While the cryptocurrency market is generally volatile, there are a few reasons for the crash. The Chinese authorities have continued to criticize cryptocurrency mining for its impact on energy consumption and carbon footprint, which has sparked a mass exodus from the country. Several large cryptos have been down more than 10% in the last 24 hours.
There are a number of factors behind the crash. First, the U.S. Securities and Exchange Commission rejected the idea of a spot bitcoin ETF, which would have brought billions into the crypto market. Second, the Chinese government has also tightened its regulations on mining. The tighter control on cryptocurrency mining is a factor in this crash. Moreover, the sudden pullback occurred after shares of Chinese real estate giant Evergrande fell to their lowest levels in 11 years. Analysts warned that the collapse of Evergrande could impact the broader crypto market. Additionally, the emergence of an Omicron variant was a contributing factor to the stock market. Finally, the ICOs reportedly have spooked investors by triggering a panic selling frenzy.
This crash has wiped out over $2.4 billion in the crypto market. In the past 24 hours, the market’s trading volume has skyrocketed to $218 billion, which is more than 17 per cent lower than December 3, 2021. As a result, investors have been scrambling to lock in profits or minimize losses. They’ve been trading in an effort to protect their holdings against a complete loss.
While the market has been on a tear recently, the price of Bitcoin fell more than 16% today. The fall is a sign that investors are fearful of cryptocurrencies. It is possible that the US Congress’ investigation into cryptocurrency executives is one of the reasons the market crashed. Further, a number of crackdowns in other countries have hit the cryptocurrency markets, including India’s move to ban private cryptocurrencies and China’s clampdown on Bitcoin mining.
Bitcoin, meanwhile, has rebounded on Wednesday, but still remains near its all-time high. Other leading cryptocurrencies, such as Solana, XRP, and Ethereum, are struggling to regain their momentum after a rough start last month. In the meantime, Tesla pulled out of a Bitcoin payment policy. The crypto market is down by a similar margin. With this in mind, it is crucial to understand what the impact of the China ban on crypto is.
The crash in Bitcoin and other major cryptocurrencies was triggered by the People’s Bank of China’s recent ban on cryptocurrency services. It was also a result of climate concerns. In addition, Elon Musk’s decision to stop accepting Bitcoin in Tesla was also controversial. This was partly due to environmental concerns and the decision to shut down the company’s operations in China. Its prices dropped by 30 percent on Friday.
