Cryptocurrency market is down 11.84% on the last 24 hours (1pm, 12 May 2022).
After gains and record highs in 2021, crypto currencies are enduring a turbulent time with unpredictable price changes.
Bitcoin is now worth half the value it was just six months ago when it reached a market high of £51,000 per coin on 10 November 202, while Terra (LUNA) has collapsed after a major drop of 96%.
- Bitcoin (BTC) -9.27% (£23,143.65)
- Ethereum (ETH) -18.93% (£1,585.24)
- Tether (USDT) +0.00% (£0.81)
- BNB (BNB) -9.94% (£222.66)
- XRP (XRP) -22.43% (£0.31)
- Binance USD (BUSD) +2.28% (£0.83)
- Cardano (ADA) -25.14% (£0.38)
- Solana (SOL) -27.71% (£35.84)
- Dogecoin (DOGE) -23.14% (£0.0631)
- Polkadot (DOT) -23.13% (£6.68)
- Wrapped Bitcoin (WBTC) -9.67% (£23,011.76)
- Avalanche (AVAX) -24.52% (£22.97)
- SHIBA INU (SHIB) -25.00% (£0.00000870)
- Terra (LUNA) -96.90% (£0.0430)
The recent decline is being attributed to a loss of confidence in the crypto market amid economic pressures around the world brought on by Russia’s invasion of Ukraine and post Covid lockdowns.
It follows recent crashes brought on by Tesla making a u-turn on accepting Bitcoin as payment for its products and China clamping down on initial coin offerings, block exchanges and warned against speculative trading.
A further blow was dealt when China ordered Bitcoin mining in its Sichuan province to shut down completely and furthermore told banks to stop supporting crypto transactions, in a latest wave of restrictions on cryptos.
Now the country’s central bank, People’s Bank of China, has effectively banned digital coins after announcing all transactions of cryptocurrencies are illegal.
The decision has already had an impact on the global crypto market.
This is what’s going on in the world of cryptocurrencies...
Why is the crypto market down?
An uncertain economic outlook for many countries across the world has filtered into the deregulated digital currency universe, prompting a lack of confidence in the market.
It follows China clamping down on crypto markets and Musk’s shock announcement when he appeared to be in favour of Tesla acccepting Bitcoin as payment for its services.
The electric car company bought $1.5b (£1.06b) of Bitcoin shares, which in turn sent the market price of both the crypto and Tesla soaring, but those days are a distant memory to traders.
The impact on the environment of Bitcoin mining - a complicated process of minting new digital tokens - saw Tesla withdraw this option for customers.
The billionaire entrepreneur said: “We are concerned about rapidly increasing use of fossil fuel for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Musk reaffirmed his belief that cryptocurrency has a “promising future” but that it “cannot come at great cost to the environment”, in his Twitter post.
Musk has been a long-time advocate of cryptocurrencies and the Tesla decision was felt across the market, with other digital tokens going down in price.
What is the price of Bitcoin and Ethereum?
The price of Bitcoin was £23,143.65 after the latest drop in prices (12May), according to Coinbase.
Ethereum’s value is now £1,585.24.
Cryptocurrencies are seen as an alternative to traditional banking methods, cheaper to move money around due to not being regulated by the government or its banks.
The decision by Tesla, and announced by Musk, was seen by some as a slight on the credibility of cryptos to become a viable method of payment against physical currencies.
Which crypto prices are down?
Bitcoin wasn’t the only cryptocurrency to feel the initial effects, with most of the top 10 all experiencing dips in value.
Dogecoin, which was initially set up as a joke in 2012 before seeing its shares skyrocket, has also dropped while Solana has seen its market price rise by more than 8%.
Musk’s influence cannot be underestimated as, even though the likes of PayPal, Mastercard and Facebook have backed cryptos, the Tesla announcement still rocked the market.