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Sudden Cryptocurrency Crash Wipes $400 Billion Off Market

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Sudden Cryptocurrency Crash Wipes $400 Billion Off Market

The cryptocurrency market has suffered a massive, sudden and unexplained crash this week.

Nearly every single coin available to buy has been affected and it's estimated to have wiped $410 billion off the market.

It's a devastating blow to investors around the world, many of whom were starting to see small gains after the huge crash earlier this year.

Bitcoin is down 10.3 per cent, Ethereum has dropped 14.5 per cent, Cardano is 17 per cent lower, and Ripple has fallen nearly 22 per cent.

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Bitcoin was trading just above USD$52,500 before the crash and then plummeted to less than USD$44,000, according to CoinMarketCap.

Credit: Coin Desk
Credit: Coin Desk

Crypto analyst Glen Goodman tweeted: "Horrible chart damage being done in BTC and the rest of the crypto market.

"Bitcoin just bounced cleanly off the previous resistance line. Is this a retest of that line or the start of something much worse?"

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Some of the coins have since bounced back a tiny bit from the crash, however it's nowhere near to where they were at the start of the week.

It comes on the same day as El Salvador adopted Bitcoin as an official trading currency in the country.

The South American country is the first in the world to make a digital coin legal tender and experts are anxiously waiting to see how this experiment will play out.

El Salvadoran President Nayib Bukele revealed his country actually bought during the dip.

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Buying in the dip is what some investors do to take advantage of plunging prices in the hope the coin will recover and make their investment much higher in the long term.

Bukele said on Twitter his country has upped their Bitcoin stock to 550 coins, which represents around USD$25.5 million.

Kay Khemani, managing director at Spectre.ai, said El Salvador adopting digital coins as part of its currency could be a massive win or a massive failure for others around the world.

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"The impact of El Salvador adopting BTC is broadly priced into the Bitcoin story, but other developing countries following in their wake are not. This creates a series of potential and positive catalysts for long term adoption," he said.

"While this decision is a very forward-looking step for El Salvador and Bitcoin alike, it is a double-edged sword as no major economy will follow suit any time soon," he predicted.

"Instead, El Salvador has become the proverbial test subject and major nations will look to see whether or not embracing Bitcoin was worthwhile."

"The 'wait and see' approach is the best game-theoretical option and the one that will likely be adopted."

Featured Image Credit: PA

Topics: News, Cryptocurrency, Technology

Stewart Perrie
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