Featured Image Credit: Alamy
Topics: Bitcoin, Cryptocurrency, Now
Joe Harker
A crash in the value of cryptocurrencies has wiped out more than $1 trillion in market value.
If there's one piece of advice I'd have liked to give to my younger self, it would probably be 'invest in Bitcoin', though after the crypto market lost more than $1 trillion worth of market value, I'd also tell my younger self to cash out at a certain point.
Bitcoin fell 15% in value on Friday and was trading at a price of around $36,000, the lowest value it has held since July. The second-largest cryptocurrency, Ether, had lost around 20% in value and now worth about $2,500.
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The losses represent around $150 billion worth of value wiped out, and they are part of a wider trend of cryptocurrency crashing in value.
CNBC reports that Bitcoin only recently hit an all-time high price of more than $68,000 in November 2021, but since then plummeting prices of cryptocurrency have wiped more than $1 trillion worth of value off the crypto market.
Some experts are reportedly warning that the crypto market is headed for a downturn as greater scrutiny, tighter regulations and wild fluctuations in the price of Bitcoin risk dampening enthusiasm for pouring more money into cryptocurrency.
China has banned all crypto-related activities, while the US government is preparing to task federal agencies with assessing the risks posed by the cryptocurrency market.
The market is currently seen as extremely risky, and flagship cryptocurrency Bitcoin losing more than 45% value in a couple of months will have done nothing to allay fears that a huge amount of money is being poured into a market that carries so much risk.
According to the FT, there is concern that a rise in value for cryptocurrencies is dependent on speculation over future growth. As such, it represents a bubble that could burst and take a lot of money with it, when people realise their numbers on a screen only go up because other people think they will.
If investors continue to lose confidence in the value of cryptocurrency and decide to cash out, then it could burst the bubble as values plummet further.
Needless to say, that would be really bad for anyone who has put more money into cryptocurrency than they can afford to lose.
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