As the Bitcoin market cap drops 11% in 24 hours, the world’s most significant 100 cryptocurrency tokens are trading in the red.
Overall the entire cryptocurrency market cap fell below 12% in the last 24 hours, according to coinmarketcap.com.
Cryptocurrency drops in the last 24 hours
Ether, the second-biggest cryptocurrency, went down 15%, dropping to $2,400 in the last 24 hours.
The fourth-largest coin, Binance, saw a decline of over 17%, while Cardano slumped to over 15%.
On the other hand, Polkadot and Solana crashed at 20%, while Dogecoin has declined by over 13%.
Russia’s proposal to ban cryptocurrency
Analyst at digital asset research firm Quantum Economics Jason Deane said, “Rumors of Russian mining bans, the effects of tapering programs and ongoing regulatory concerns in certain jurisdictions are currently taking more weight in trading and investment decisions than the underlying long-term fundamental.”
Furthermore, the Russian Central Bank has proposed to ban cryptocurrency. The bank states concerns over risks enforced by cryptocurrency.
They claim that the financial stability of its citizens and sovereignty of monetary policy would be at risk.
Jason Deane also added, “At the same time, increased use and adoption of Bitcoin in high-inflation economies creates a confusing picture leading to lack of decisive direction and momentum either way.”
However, Sean Farrell and Will McEvoy Fundstrat Digital Asset Research strategists wrote in a note, “Bitcoin and the broader crypto market remain subject to the whims of macro variables.”
Nevertheless, Russia is proposing to the government to ban all mining and use of cryptocurrency in the region.
Despite the claims of terror financing and years of resistance, Russia granted legal status to cryptocurrencies in 2020.
Analyst’s take on Bitcoin market cap drop
Head of research at IntoTheBlock Lucas Outumuro says, “Macroeconomic fears and poor technology company earnings have also exacerbated this correlation.”
Furthermore, IDX Digital Assets founder Ben McMillan said, “This is nearly always the case with Bitcoin. $40,000 was an important support which has now turned into a resistance level and we could certainly see more downside over the weekend.”
Jason Deane also said, “This sentiment is fueled by a slew of gloomy news that overwhelms any form of objective asset data. Once fear sets in, it takes a while to break and you simply have to wait for capitulation before you can move back to “normalized” ranged.”
Along with Russia suggesting to ban cryptocurrency, regulators in Singapore, the UK, and Spain suggested making the rules on crypto-asset promotion more rigid.
Risks of investing in Bitcoin
Various cryptocurrency experts have warned investors of the volatility in Bitcoin. While the Bitcoin market cap drops 11% in 24 hours, it is not an unfamiliar pattern.
Founder of Fit Advisors, certified financial planner, and certified public accountant Anjali Jariwala told CNBC Make It, “ It’s a very volatile asset class. You have to be comfortable with the swings and you have to be comfortable also losing your money.”
Furthermore, she says, “You have to make sure that it’s money that you can really afford to lose.”
President of Bone Fide Wealth and certified financial planner told CNBC Make It, for some people, volatility “may be OK, that may coincide with your appetite for risk and your own risk tolerance and investment time horizon.”
While the market has seen better days, Bitcoin and various other cryptocurrencies are heading for difficult times.