CryptoCurrency market crash

The sharp volatility in cryptocurrencies over the last week was fuelled by an announcement by SpaceX founder and Tesla CEO Elon Musk, who expressed concerns about carbon emissions from Bitcoin mining.

A broad crypto market crash on Wednesday wiped out about $1 trillion in market value, down from $2.5 trillion just a week ago. Bitcoin, which accounts for 40% of the global cryptocurrency market, fell 30% to $30,000 on Wednesday, its lowest level since January.

Bitcoin had recovered to around $37,500 by Friday, but it was still well below its all-time high of $64,000, which it had reached just a month ago.

The jittery market was fueled this week by a combination of factors, including government warnings about increased regulation and tweets from influential market mover Elon Musk. Another reason being that Chinese officials signed a law prohibiting the use of cryptocurrency in the country. Financial institutions and businesses were warned not to accept digital currencies as payment or provide services using them, according to the central bank.

Other cryptocurrencies were not spared from the threat of increased regulation. Ethereum has lost more than 30% of its value. Meme coins such as Dogecoin and Shiba INU were not spared from the crypto bloodbath, falling by more than 21% and 32%, respectively.

Volatility is baked in to the cryptocurrency market, but the digital asset’s explosive growth has surely attracted hordes of amateur and professional investors looking for quick profit.