Bitcoin Marks a Six-Month Low Shedding $1 Trillion in Market Cap
Published: January 26, 2022
Cryptocurrencies are experiencing a new low after the worst week for the stock market.
Bitcoin hit its new all-time high in November 2021. Many cryptocurrencies have been selling off because interest rates in the US are climbing high, fast, and more aggressively than ever before.
However, two months later, things are not going so well for Bitcoin or Ether, another crypto with excellent value in November. The new year seems to have brought problems for crypto and crypto owners.
In November 2021, Bitcoin’s market cap was $1.3 trillion, and now it’s down to $665 billion. It appears that the crash over the weekend is the second largest one for the US dollar decline. The broader crypto market has lost over $1 trillion between November 2021 and January 2022,
Investors have been dumping shares in tech companies expecting that the US Federal Reserve will limit the monetary policies in an attempt to fight the currently increasing inflation rates.
There are no conclusive answers yet. But much is attributed to the inflation that is causing the market drop.
Additionally, the US Federal Reserve is taking steps towards launching a US digital currency that the Federal Reserve would back.
Stock markets worldwide have been experiencing their most significant declines in over a year, and fast-growing companies during the COVID-19 pandemic have been taking a hit.
The Russian Central Bank’s draft proposals to ban all crypto mining and trading may have affected the crypto sell-offs. Such a ban would stop the mining and trading in what is one of the world’s biggest crypto centers.
The Russian Central Bank’s announcement didn’t immediately affect Bitcoin. But the value dropped more than 10% a day later.
The central bank’s 36-page report said that besides speculative demands for bitcoins’ growth in the future, there is also the aspect of financial pyramids that may be causing the drop.