Bitcoin price crash: Why is the crypto market collapsing?
Bitcoin has experienced one of its worst sell-offs in its history, plummeting in price by nearly 20 per cent over the last 24 hours to take it to its lowest level in six months.
Several other leading cryptocurrencies have suffered even worse downfalls, with eight of the top 10 most valuable tokens falling by more than 20 per cent since Sunday. The losses have totaled more than $300 billion for the combined crypto market, leading to fears among investors that the bull market that began in November 2022 may be coming to an end.
The most recent slide began when weak jobs figures in the US last week prompted concerns that the worldâs largest economy was slowing down.
It led to a record-breaking drop of 12.5 per cent for Japanâs Nikkei 225 on Monday, while the FTSE 100 and Euronext 100 also fell by between two to three per cent.
In the crypto market, bitcoin $BTC dropped below $50,000 (ÂŁ39,000) for the first time since February, while Ethereum $ETH saw its value fall more than $1,000 in a matter of days, down from $3,300 at the start of the month.
This year has seen two major events for bitcoin, both of which helped provide momentum for a record-breaking rally that peaked at $74,000 in March.The first was the approval of the first ever bitcoin spot exchange traded fund (ETF) by the US Securities Exchange Commission (SEC) in January, which brought billions of dollars of institutional investment to the crypto market for the first time.
This was followed by the bitcoin halving, which saw the rewards for mining the cryptocurrency slashed in half for the first time in four years. The sudden drop in supply, combined with the increase in demand, boosted both bitcoin and the rest of the crypto market before the latest downturn.
