The staggering amount of wealth the cryptocurrency market keeps is so huge that even a little bit of movement can result in a shift of value in billions
Earlier the day, the cryptocurrency market witnessed a crash in just a matter of few minutes where prices of bitcoin and ethereum also fell down. Other than these top coins, almost every other major crypto asset experienced the same. There was an amount of some $100 billion which was wiped out from the whole cryptocurrencies combined in a few minutes.
The biggest cryptocurrency by market capitalization, bitcoin (BTC) has decreased by almost 5% in just 24 hours. While at the same time the price of Ethereum (ETH), the second largest cryptocurrency by market cap, has also decreased by almost the same amount. Other than these, so called ethereum killer cryptocurrencies Solana (SOL) and Cardano (ADA) alongwith Avalanche (AVAX) have reduced by around 3% where XRP of Ripple Network and LUNA token of Terra network have also lead to significant crypto markets to get low.
On wednesday, markets were thrown into a chaotic situation when the news of interest rates hiking by the US Federal Reserves broke out. In response to this news many institutional investors and individual investors have shifted towards safer assets in order to safeguard or restore their wealth from stinging market situations.
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There are also possibilities of the US economy going into a recession because of hiking the interest rates and tightening monetary policies. Wall Street also had a bad day yesterday where many companies performed somewhat worse than usual. For instance, The Dow Jones Industrial Average has seen a loss of more than 1000 points and the traditional market for tech companies, Nasdaq has seen a fall of 5%.
The movement of bitcoin that usually goes alongside the stock market has been attached to it with a very narrow range throughout this year. The top most cryptocurrency has struggled all this time to get back to its usual place from later last month during the broader sell off in the market. Other than bitcoin, the S&P 500 index has also seen fall to low making another low for this year.
The UK manager for bitcoin and Luno crypto exchange, Sam Kopelman warned that bitcoin from here could also slip back to its previous support range that was found at $36,000 to $37,000. Outlook of Kopleman for Ethereum, Solana, Cardano, Avalanche, XRP and Luna is somewhat less optimistic although he has some hope for bitcoin.
Source: https://www.thecoinrepublic.com/2022/05/07/do-you-know-how-much-money-was-wiped-out-in-moments-when-bitcoin-and-ethereum-crashed/