Why is the cryptocurrency market down today?

Cryptocurrency prices including majors such as Bitcoin, Ethereum, Solana, BNB, Cardano and XRP are all down.

The price of the leading bitcoin is now down 12% from last week and is trading at $42.5K as of this morning (January 7th), according to Coinmarketcap.

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All five major currencies lost their value in the past week

Today, the global crypto market is down 1.06% in the past 24 hours, with the biggest losers including big names like Ethereum and Polkadot.

The drop occurred amid uncertainty in the broader US economy, as the Federal Reserve discussed raising interest rates in March – sooner than expected.

Ethereum is down 3% over the past 24 hours, with Solana down 4.27% and Polkadot down 0.85%.

The USDC and USDT currency pair also fell and the avalanche.

The latest drop comes on the heels of the cryptocurrency’s crash at the beginning of December, shortly after bitcoin reached a record value of $69,000 in November.

Bitcoin has now lost a third of that value.

Of the 100 cryptocurrencies listed on Coinmarketcap, 97 fell yesterday, with most of them recovering small amounts of ground this morning.

However, all five of the biggest cryptocurrencies continued their decline this morning.

The $1.5 trillion cryptocurrency market was wiped out after the December 4th crash, but the market has since recovered some of those losses.

A trader lost $5 billion after the bitcoin price plummeted, highlighting the risks of investing in cryptocurrencies.

It was recently revealed that 90% of all bitcoins have been mined.

It comes as new research shows that 18.89 million coins have been mined out of the 21 million, which is the maximum.

And in another blow to the market recently, one of the largest cryptocurrency exchanges said it would shut down its trading platform.

The Binance Forum in Singapore has clashed with the regulators.

Earlier this year, regulators asked Binance to stop its activities in the UK.

The crash in early December was believed to have been driven by growing fears that global governments would crack down on crypto legislation.

The recent decline is credited to the US central bank’s apparent desire to raise interest rates.

This would fight inflation – and thus gain additional value from cryptocurrencies, which have long been seen as an ‘inflation hedge’, an asset that is protected against rising market prices.

Less price hike, less love for cryptocurrency.

encoder volatility

The cryptocurrency market has also been hit by India’s plans to ban all private cryptocurrencies – apart from some exceptions – and launch its own central bank-backed digital currency.

Cryptocurrencies are very volatile, which means that their values ​​often fluctuate significantly without warning, as seen in the latest drop.

Investing in cryptocurrency is a very risky business.

You could be left with less cash than you put in, and you could lose it all – even if you spend what appears to be a safe bet.

You may not be able to access your investment if the platforms go down and you may not be able to convert cryptocurrency into cash.

There have also been warnings about cryptocurrency scams, where people lose huge amounts of money.

You should never invest in something you do not understand and you should not put money that you cannot fully afford to lose.

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Why did the cryptocurrency market drop?

Cryptocurrencies have been particularly volatile lately and there are several reasons for this.

Twitter’s chief financial officer, Ned Segal, said investing in cryptocurrencies is “nonsensical at the moment”, alarming buyers in Silicon Valley.

China has also announced plans to clean up virtual currency mining, according to CNBC.

Many crypto mining areas in China are now drastically reducing operations.

Previous moves by the country to crack down on mining and cryptocurrency trading had previously dragged the markets back.

Coins took another big hit in April when Turkey’s central bank banned the use of cryptocurrencies for purchases.

From Dogecoin and Litecoin to Bitcoin – Below is an explanation of the different cryptocurrencies.

5 Risks of Cryptocurrency Investments

The Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.

  • consumer protection: Certain investments that advertise high returns based on crypto assets may not be subject to regulation other than anti-money laundering requirements.
  • price volatility: The high price volatility of crypto assets, combined with the inherent difficulties in reliably valuing crypto assets, puts consumers at high risk of losses.
  • Product complexityThe complexity of certain products and services related to crypto-asset groups may make it difficult for consumers to understand the risks. There is no guarantee that crypto assets can be reconverted into cash. Converting crypto assets to cash depends on the supply and demand that exists in the market.
  • Fees and feesConsumers should consider the impact of fees and costs on their investment, which may be greater than those of regulated investment products.
  • Marketing materials: Companies may overestimate product returns or underestimate the risks involved.
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