TL;DR Breakdown
• Bitcoin has dropped 54% in value.
• Ethereum and other cryptos are affected by China announcement.
Ethereum and Bitcoin, the leading cryptocurrencies, dropped to their lowest value in a while on Wednesday, which had not been seen in months. The last time something of sorts occurred was March of last year, where cryptocurrencies presented high losses. This drop in prices occurred with the measure that China applied 24 hours ago in which they were seen to have prohibited financial institutions from using cryptocurrencies.
During the cryptocurrency crash, nearly $1 trillion was wiped from capitalization in the crypto market. According to CoinGecko.com, hours ago, the capitalization of cryptocurrencies was $1.65 trillion.
The largest-cap cryptocurrency on the market was already under pressure from Elon Musk with his latest tweets. The news from China only added to the problems facing the top cryptocurrency’s valuation, falling to $30,066 million. Bitcoin is capitalized at less than $43 billion due to the decline, with more decline, unfortunately, expected.
Ethereum and Bitcoin crash
The cryptocurrency that has received the most significant impact with the news from China has been Bitcoin; losing 54% of its value. In previous months the cryptocurrency had reached its historical all-time high of $64,895.
Panxora CEO Gavin Smith is not surprised by Bitcoin’s drop in capitalization. Smith points out this fall in cryptocurrency was to be expected due to its influx of investors. The cryptocurrency is in a tailspin, which Smith claims is part of its nature, expected to help maintain its popularity in the coming months. This is definitely not the end of Bitcoin or Ethereum, however, it was a very discouraging price drop.
The Bitcoin crash undoubtedly affected other cryptocurrencies, such as Ethereum, which fell to $1,850. The second-in-command cryptocurrency had not lost its capitalization since the end of January. On the 12th of May, Ether reached its all-time high, and today it has plummeted by 57%.
Dogecoin also lost value
The DOGE cryptocurrency that has gained fame for being inspired by a meme lost 26% of its value, according to Coingecko. Tesla, which had shares in Bitcoin and Dogecoin, lost 4.8%, which would be approximately $555.83.
Some investors have predicted that cryptocurrencies like Ethereum may suffer further losses of this level. However, they suggest that Bitcoin’s drop below $40,000 may trigger a tide of new investments. As Bitcoin is proven to generate substantial profits, traders can take advantage of the declining market to join the market.
Investors could also take this drop as a signal to sell their BTC and exchange it for gold. Shortly, cryptocurrencies may lose more value, but they are expected to recover from this current situation. JPMorgan analytics experts cite that cryptocurrencies have a promising future regardless of the happenings of recent days.
