Major cryptocurrencies continued their multi-day sell-off on Monday (Jan. 24), as digital coins are moving in tandem with stocks which had a rough week around the world.
Wall Street’s tech rout on Friday saw the S&P 500 and Nasdaq Composite log their biggest weekly percentage drops since Covid struck.
The total market cap of cryptocurrencies fell below $2 trillion last week after reaching a high of $3.1 trillion in November.
Monday’s plunge resulted in an overall market capitalization loss of around $130 billion for the total cryptocurrency market in just 24 hours.
Bitcoin, the leading digital currency, was last down around 4%, falling to $33,755.57, according to Coin Metrics. Other cryptos suffering major setbacks included Ethereum, which plunged 7% to $2,239.08. Both are 50% off their all-time highs.
Earlier, blockchain platform Solana experienced a 48-hour network outage caused by “excessive duplicate transactions” amid already falling prices of digital currencies.
“The pessimism continues to grow among investors and traders when it comes to riskier assets and this is chiefly influencing the price of equities and bitcoin,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.
“The thing with bitcoin is that when it begins to fall, the price action drops like there is no tomorrow,” added Aslam.
The slump seems to be tracking broader market developments, as investors prepare for tighter monetary policy from the U.S. Federal Reserve and higher interest rates.
Analysts also cite a proposal from Russia’s central bank on Thursday to ban the use and mining of cryptocurrencies on Russian territory. This was a big deal, as Russia is one of the top three Bitcoin mining countries on earth and joins China, which imposed its own ban on activity last year.
Meanwhile a top official of the European securities regulator European Securities and Markets Authority has reportedly said that the EU should consider banning energy-intensive forms of crypto mining on account of the risks posed to the environment and climate change.
Investors also watched for developments in Ukraine as tensions between Russia and the West grow. The U.S. State Department recommended Sunday that all U.S. citizens in Ukraine depart the country immediately.