Virtual currency market sold off, Bitcoin fell to $36,000, Ethereum fell 20%

Virtual currency market sold off, Bitcoin fell to $36,000, Ethereum fell 20%

 price crashed on January 22, 2022 and Ethereum also “crashed”. The market cap of the cryptocurrency also “evaporated” 150 billion dollars.

BTC price crashed on January 22, 2022 and Ethereum also “crashed”. The market cap of the cryptocurrency also “evaporated” 150 billion dollars.

Bitcoin fell 15% to $36,000 on Jan. 22, according to CoinMarketCap. Ethereum — the second largest cryptocurrency by market cap — falls 20% to 2,500 U.S. dollar.

The cryptocurrency market joined Wall Street’s decline. Major stocks also fell, with the Nasdaq Composite down as much as 7.6% and the S&P 500 down 5.7% this week.

Rising interest rates have prompted investors to reduce positions in risky assets. Earlier this week, the US 10-year Treasury yield exceeded 1.9%.

The Fed also unveiled plans to raise interest rates three times and trim its balance sheet.

A common argument made by bitcoin speculators is that amid the government’s stimulus package, bitcoin is seen as a hedge against inflation. However, analysts say there is a risk that the Fed could turn more restrictive, curb inflation and negatively impact Bitcoin.

“I’m a bit disappointed to see that bitcoin price isn’t reacting more positively after bond yields have fallen,” said Edward Moya, market analyst at Oanda.

Many experts’ forecast for the near future is that the price of Bitcoin will continue to fall due to tightening investment regulations in many countries along with tightening of interest rates to control inflation.

After China, it was the turn of the Central Bank of Russia to propose a ban on the use and mining of cryptocurrencies on its territory on January 20. The reason given is that this currency threatens the financial stability, the well-being of the people and the monetary sovereignty of the country. Russian authorities have repeatedly argued about banning cryptocurrencies. Some officials criticized that Bitcoin could be used to launder money or finance terrorism.

“Russian fiat currency has steadily depreciated over the past several decades. This makes Bitcoin an attractive investment for Russians in recent years,” commented Oanda’s Mr. Moya.

“Russia is among the top three countries in terms of bitcoin mining. Therefore, the cryptocurrency proposal pushed the bitcoin price well below the $40,000 threshold,” the expert said.

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