Bitcoin cracks 19% to fall below $49,000 level as crypto rally falters
Bitcoin had hit an all-time high of $58,332.36 last week, becoming the first digital currency in the world to have a market valuation of $1 trillion. It took the crypto asset less than two months to reach this mark from a price of $25,000 as of end of December.
Cryptocurrencies extended losses on Wednesday, with Bitcoin cracking 19% to slip below the $49,000 level. The biggest cryptocurrency, in terms of market capitalisation, traded at $49,767, down 14.6% at around 1155pm, as per data available with WazirX.
Bitcoin had hit an all-time high of $58,332.36 last week.
"Over the last 24 hours, crypto markets saw a bloodbath with all major cryptocurrencies taking a plunge. Bitcoin price dropped as much as 19% and is trading at $47,400 at the time of writing. Many analyst points towards an over-leveraged market as the primary cause for the price dip. The second-largest cryptocurrency by market cap faced a severe blow too after hitting its all-time high price of $2,000. It is currently trading at $1500. The gas fee on the Ethereum blockchain is also seeing a record high spike leading to a $25 million liquidation on DeFi platforms," said Ashish Singhal, chief executive officer and co-founder, CoinSwitch Kuber, cryptocurrency investment platform.
Decentralized finance or DeFi is an experimental form of finance that does not rely on common financial intermediaries such as brokers, exchanges, or banks to offer traditional financial instruments, and instead utilises smart contracts on blockchains. Ethereum is the most commonly used crypto for DeFi applications. A spike in transaction charges on Ethereum network tends to affect DeFi activity.
During the last 24 hours, Bitcoin hit a high of $51,413.61 and a low of $44,964.49, while Ethereum, the second-biggest cryptocurrency, hit a high of $1,655.63 and a low of $1,361.59.
Ethereum traded at $1,630.89 at around 1155pm, down 20% from its all-time high $2,036.55 mark. Stellar traded 18% lower at 0.41.
Meanwhile, regulatory opinion has hardened against cryptocurrencies in India.
"We have major concerns about cryptocurrency from a financial stability perspective," Reserve Bank of India governor Shaktikanta Das told news channel CNBC TV18 on Wednesday.
Last week, Bitcoin became the first digital currency in the world to hit a market valuation of $1 trillion. It took the crypto asset less than two months to reach this mark from $25,000 as of end of December.
Prices rose as several big corporates took exposure to bitcoin.
Currently, Bitcoin commands a market cap of $931.82 billion.
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