Bitcoin tumbled sharply after rising bond yields in the US and the Russian Central Bank's proposal to ban crypto mining.
The downward trend in the crypto market in recent weeks continued with Bitcoin falling below $ 39,000 today. The rise in US bonds and the Central Bank of Russia's restrictions on crypto were effective in the sharp fall.
While Bitcoin fell below $ 39,000 to the lowest level in the last 6 months, Ethereum also fell to $ 2,860 with a loss of 8 percent. Besides, the price of Dogecoin also fell 7.7 percent to $ 0.15 . Ripple , on the other hand, was traded at $ 0.68, down 8 percent.
150 billion dollars evaporated in 24 hours
According to CoinMarketCap data, crypto money markets have lost close to 150 billion dollars in the last 24 hours. Digital currencies have generally lost about $1 trillion in value since their peak in November.
The drop came after sharp losses in the stock market. In the US, the Nasdaq has dropped close to 5 percent this week. The S&P 500 index, which lists 500 large stocks with high index value in the American market, entered its third consecutive week of losses.
10-year U.S. Treasuries rose earlier this week, with higher rates causing investors to abandon their positions in riskier assets.
The strengthening of the signals that the US Federal Reserve (Fed) will implement a tight monetary policy is also a factor in investors abandoning risky assets. While Bitcoin is seen by some investors as a hedge against inflation, the trend to abandon risky crypto investments in the face of a more hawkish Fed is outweighing.
In her note on the subject, Huobi Global Research Manager Beste Naz Süllü said, “Before the Fed decision to be announced next week, the market wants to see the first Fed meeting of the year, although the market expects that 'interest rates will be increased in March'. So much so that the weak risk appetite continues not only in cryptocurrencies, but also in global markets.”
BAN PROPOSAL FROM THE CENTRAL BANK OF RUSSIA
Yesterday, the Central Bank of Russia proposed banning the mining of cryptocurrencies on the grounds that the Russian economy is adversely affected.
Pointing out that the growth in the crypto money market has turned into a bubble, the report stated, “The Central Bank of Russia believes that the current scale and further spread of cryptocurrency mining in Russia carries significant risks for the economy and financial stability.”
In the report, it was stated that mining leads to intensive electricity use, “Accordingly, the best solution is to ban cryptocurrency mining in Russia. Cryptocurrencies are also used extensively in illegal activities. That's why Russia needs new laws and regulations that effectively ban its trade in the country.