The cryptocurrency market has suffered a massive drop that put crypto token prices at multimonth lows.
The news: The cryptocurrency market saw $130 billion wiped off its value in the last 24 hours, per CNBC.
- Major coins — such as bitcoin and ether — all suffered massive drops.
- Bitcoin and ether are off more than 50% from all-time highs, according to CNN.
What’s happening: “The movements in cryptocurrency markets have been correlated to the selling seen in higher risk assets like technology stocks as investors prepare for tighter monetary policy from the U.S. Federal Reserve and higher interest rates,” according to CNBC.
What they’re saying: “It’s possible that macro economic concerns, such as the Fed’s response to inflation rates, have facilitated more de-risking activity in general,” said Juthica Chou, head of OTC options trading at Kraken, according to CNBC. “The recent price drop, coupled with high volatility, could be leading to further selling as participants look to reduce risk.”
The bigger picture: Investors are worried about the state of cryptocurrency, especially as countries make major moves to combat the crypto market.
- Russia’s central bank recently proposed a ban on cryptocurrency and crypto mining.
- China has launched a full ban on trading and mining.
- India has flirted with the idea of banning cryptocurrency, too.
Yes, but: Goldman Sachs once said that the price of a bitcoin could reach more than $100,000 by 2027, so it’s worth keeping an eye on, per Barron’s.