Another Friday, another sharp bearish turn for leading cryptocurrencies. Bitcoin (CRYPTO:BTC), Ethereum (CRYPTO:ETH), and Solana‘s (CRYPTO:SOL) respective tokens were down roughly 5.7%, 6.8%, and 8.9% over the previous 24 hours of trading as of 4:30 p.m. E.T.
After concerns about the impact from the coronavirus omicron variant prompted steep valuation pullbacks for most cryptocurrencies on Black Friday, investors seemed to have digested the risk. Many top cryptocurrencies had been posting strong gains across the last week of trading, but valuations are once again tumbling in today’s trading session.
Why did crypto crash today? Cryptocurrency market price down
Cryptocurrency market is down 5.24% on the last 24 hours (10.40am, Monday 6 December).
After a year of gains and record highs, crypto currencies are enduring a turbulent time with unpredictable price changes.
Bitcoin and other leading crypto coins experienced a significant drop in share price after investors began dumping mining equipment as China announced fresh regulations.
Cryptocurrency crash: Bitcoin, Ethereum fall in value. Here are possible causes
There seems to be no single factor driving the Cryptocurrency crash this week, the phenomenon instead being caused by a multitude of factors ranging from “rising selling pressure, end of year profit-taking, as well as speculation”.
Bitcoin prices fell to their lowest rates since October 13 on Tuesday evening, according to data sourced from CoinDesk – a New York-based news site specialising in cryptocurrencies – that cited a number of factors behind the crash. According to the website, Bitcoin’s value depreciated to $55,460.96 last evening, an additional 20 per cent slump from the all-time high of nearly $69,000 that it reached earlier on in November.
Cryptocurrency Update: Bitcoin Price Today Down by 22%, Ether, Cardano, Others in Red
Bitcoin prices fell drastically on Saturday, December 4, amid Christmas risk-off taking cue from the global stock markets, which remained volatile for the same reason. The global cryptocurrency markets on the day logged a sharp decline in its numbers as more investors sold off stocks to settle for secure investment options as Christmas day neared. Bitcoin, the latest victim to this sell off, fell down to as low as $42,000 as per reports. This was as much as a $10,000 decline as compared to its price a day back. This came after Bitcoin hit a seven-week low last month to close at $54,000 after touching its all time high days back.
At its lowest on Saturday, one unit of Bitcoin sank below the $42,000 mark, losing as much as 22 per cent, as per a Reuters report. However, following this, the world’s largest cryptocurrency by market value pared its losses to settle at the $47,000 mark. Bitcoin prices stood at $47,664.16 at the time of writing this article, according to data from CoinMarketCap. This was down by 15.83 per cent over the course of the last day and by 13.48 per cent over the last seven days as per data.
Why is the crypto market down?
China’s crackdown on cryptos comes days after Musk’s shock announcement.
Musk’s decision signifies a sharp u-turn for Tesla who only started accepting Bitcoin as payment for its services in February 2021.
It came after the electric car company bought $1.5b (£1.06b) of Bitcoin shares, which in turn sent the market price of both the crypto and Tesla soaring.
Yet the impact on the environment of Bitcoin mining – a complicated process of minting new digital tokens – has seen Tesla withdraw this option for customers.
The billionaire entrepreneur said: “We are concerned about rapidly increasing use of fossil fuel for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Musk reaffirmed his belief that cryptocurrency has a “promising future” but that it “cannot come at great cost to the environment”, in his Twitter post.
What is the price of Bitcoin and Ethereum ?
The price of Bitcoin was £35,847.74 after the latest drop in prices (6 December), according to Coinbase.
Ethereum’s value is now £2,972.72.
Cryptocurrencies are seen as an alternative to traditional banking methods, cheaper to move money around due to not being regulated by the government or its banks.
The decision by Tesla, and announced by Musk, was seen by some as a slight on the credibility of cryptos to become a viable method of payment against physical currencies.