The cryptocurrency market fell more than 3% on Friday and continued the crash the market is currently going through. The decline comes after a year of gains and record highs, following changes in many factors from an increase in market value to the effects of the COVID-19 pandemic. Cryptocurrency investors are now selling their digital assets after the market plunged again.
The global market cap on Friday reached $2.32 trillion as nearly all major cryptocurrencies experienced a decline in their value. The market leader Bitcoin recorded a decline of 2.66% in the past 24 hours to trade at $46,566.02 per unit until the latest update. Another major cryptocurrency, Ethereum, has seen a 1.66% drop in its value in the past 24 hours and is trading at $3,894.88 per unit. Tokens such as Solana, Cardano, Litecoin, and Dogecoin have seen a drop in their values in recent days, indicating a market crash.
Why is the cryptocurrency market down today?
Earlier, Bitcoin and other leading cryptocurrencies saw a huge price drop after investors began dumping mining equipment following China’s crackdown on the cryptocurrency. The Chinese government announced new regulations and banned mining in Sichuan Province. China’s crackdown on token mining has started a cascade effect, causing the market to drop in value. Meanwhile, Chinese banks have also been advised to withdraw support for crypto transactions altogether.
Governments around the world proposing to ban cryptocurrencies while leaving some exceptions could create panic among investors. The Indian government’s public statements regarding the ban on private cryptocurrencies in India as well as the raising of the Cryptocurrency Act and the regulation of the Official Digital Currency Act 2021 have impacted the market significantly. Finance Minister Nirmala Sitharaman cleared the air as she informed that the government had no plans to consider cryptocurrency as a currency, causing turmoil in the market.
Crypto market crash factors
Another factor that has an impact on the global stock market, as well as the cryptocurrency market, is that over the past month, the cryptocurrency market in India has experienced a sharp decline. This is the arrival of a new type of coronavirus, namely Omnicron. Meanwhile, investors sell their coins and take profits before the end of the year and the holiday season is another secondary reason for the decline in value.