What caused the cryptocurrency market to collapse?
Terra Luna, Bitcoin, and Ethereum prices are to blame for the cryptocurrency market’s decline today in 2022.
Bitcoin has plummeted to its lowest crypto market value since January 2022 – on a day which has seen huge falls in prominent digital tokens
During the last 24 hours, the cryptocurrency market has lost 11.84 percent of its value (1pm, 12 May 2022).
It’s been a wild ride for crypto currencies since their record-breaking highs in 2021.
Terra (LUNA) has crashed after a 96% decline in value, while Bitcoin is now worth half of what it was just six months ago when it reached a market high of £51,000 per coin on 10 November 202.
BTC lost 9.27 percent (£23,143.65) of its value today.
Cryptocurrency Ethereum (ETH) dropped by 18.93% to $1,585.24
Tether (USDT) is up 0% (or £0.81) today.
A drop of 9.94 percent (£222.66) in BNB (BNB)
In terms of percentage, XRP (XRP) is down by -22.43 percent
Binance USD (BUSD) increased by 2.28 percent to £0.83.
Cardano (ADA) -25.14 percent (£0.38)
Shares of Solana (SOL) fell by 27.51% (£35.84)
Dogecoin (DOGE) -23.14 percent (£0.0631)
It was down 23.13% (£6.68) for Polkadot (DOT).
-9.67% (£23,011.76) Wrapped Bitcoin (WBTC)
Avalanche (AVAX) -24.52% (£22.97)
25% (£0.00000870) SHIBA INU (SHIB)
Terra (LUNA) is down 96.30% (or £0.0430).
Russia’s invasion of Ukraine and the post-Covid lockdowns are blamed for the recent downturn, as is a lack of trust in the crypto market.
In the wake of Tesla’s recent reversal on accepting Bitcoin as payment for its products and China’s clampdown on initial coin offerings, restrict exchanges and warn against speculative trading, there have been a number of high-profile cryptocurrency crashes.
In a new round of crypto restrictions, China ordered the shutdown of all Bitcoin mining in Sichuan region and directed banks to stop supporting crypto transactions.
All transactions of cryptocurrencies are now prohibited, according to the People’s Bank of China (PBoC), the country’s central bank.
The global crypto market has already felt the effects of this decision.
Coincidences like this are commonplace in the cryptocurrency industry…
Is there any explanation for the recent decline in the value of cryptocurrency?
There is a lack of confidence in the digital currency industry because of an uncertain economic future in many countries throughout the world.
Musk’s surprise statement that Tesla will accept Bitcoin as payment for its services came after China tightened its grip on crypto markets.
Tesla’s $1.5 billion (£1.06 billion) purchase of Bitcoin shares sent the crypto and the electric vehicle company’s market prices soaring, but those days are now a distant memory for traders.
Tesla removed Bitcoin mining as an option for customers due to the negative environmental impact of the labor-intensive process of creating new digital coins.
“We are concerned about the fast expanding usage of fossil fuels for Bitcoin mining and transactions, particularly coal, which has the worst emissions of any fuel,” the billionaire entrepreneur added.
“Promising future” for cryptocurrencies, but not at the expense of the environment, was the message from Tesla CEO Elon Musk in a recent tweet.
The Tesla decision was felt throughout the cryptocurrency market, with other digital tokens falling in value as a result. Musk has been a long-time champion of cryptocurrencies.
How much do Bitcoin and Ethereum now cost?
According to Coinbase, the price of Bitcoin dropped to £23,143.65 on 12 May.
The current value of Ethereum is $1,585.24.
Traditional banking techniques are considered as an alternative to the use of cryptocurrencies because they are not regulated by the government or its banks.
Several people interpreted Musk’s announcement and Tesla’s decision as a blow on the credibility of cryptocurrencies as a credible payment mechanism.