In the last 24 hours, the cryptocurrency market lost around $130 billion.
The two most popular cryptocurrencies, Bitcoin and Ethereum, continued their multi-day sell-off, dropping prices to levels not seen since July 2021. Currently selling for $34,300, Bitcoin was listed for nearly $70,000 in early November 2021. Similarly, Ethereum is currently listed at just over $2,200 per unit, when it sold for more than double that early last November.
The cryptocurrency market is believed to be moving in tandem with stocks that have been falling since the beginning of 2022. In fact, last week, the Nasdaq had its worst week since March 2020, which marked the early stages of the COVID-19 pandemic. The Nasdaq and cryptocurrency markets are hemorrhaging money, as tech stocks continue to slide downward and investors prepare for tighter monetary policy from the U.S. Federal Reserve, CNBC reported.
Investors in cryptocurrency are also taking a hit as the Russian central bank proposed an outright ban on the use and mining of cryptocurrencies in all Russian territories. And Russia isn’t the only country in recent weeks to consider cracking down on crypto. Many American crypto-enthusiasts are anticipating incoming regulatory scrutiny from the U.S. Federal Reserve.
Rapidly increasing global tensions and the ongoing spread of the Omicron variant of COVID-19 dampen market prospects. As Russian President Vladmir Putin continues to send troops to the border of the Ukraine, European markets prepare for the worst.
Michael Hewson, chief market analyst at CMC markets, told CNN Business that the “tipping point” occurred when the United States and United Kingdom announced they would be withdrawing staff from their Ukrainian embassies.
Hewson continued to say that this diplomatic withdrawal gave the “European markets a nudge lower” despite the U.S. State Department claiming it was done out of an “abundance of caution.”
While people may feel uncomfortable at the prospect of their diminishing returns, CNBC’s Jim Cramer instructed U.S. investors not to panic as he urged people to “do some buying.”
And, as the Omicron variant continues to spread during the winter months, more and more people continue to miss work. Further disruptions in supply chains can also be attributed to the perpetually mutating virus. However, an abundance of mild Omicron cases now means there is potential for widespread immunity in the near future.
Investors in cryptocurrency may be hemorrhaging money as the global marketplace reacts to a potential war, but they may find solace in the fact that their volatile investments often recover and strengthen with time.