Bitcoin falls below $40,000 as US Stocks Slide, Russia Considers a Crypto Ban

Bitcoin falls below $40,000 as US Stocks Slide, Russia Considers a Crypto Ban
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Bitcoin plunged below $40,000 for the first time since 10th January and is lowest since August last year. It happened as the weak market sentiment weighed on riskier assets.

There was not even a single reason for the extended sell-off but weakness in US stocks (in part due to Fed tightening), a technical break out of the recent range, and the prospect of a cryptocurrency ban in Russia that weighed on cryptocurrencies and resulted in the plunge.

Also Read: Crypto Mining and Trading were Banned by the Russian Central Bank

There was no let-up for US equity markets on Thursday as, In the US, stocks opened higher with Nasdaq 100 up as much as 2.0%, but a late slide saw the tech-heavy index finish the session down over 1.3%.

Some valuations of stocks had question marks, particularly in the technology sector. It resulted from the tight monetary policy and removal of some emergency stimulus brought in at the start of the pandemic.

The Nasdaq 100 is down around 5% in the present week alone, with the S&P 500 down just under 4% and the Dow Jones Industrial Average down around 3%.

Also Read: US-based VC firm, A16Z, plans to raise USD 4.5 Billion for Crypto Funding

Interactive investor’s Head of Investment, Victoria Scholar, said that the drop in US stocks is partly blamed for the cryptocurrency weakness. She further said that the negativity on Wall Street this week with the Nasdaq shedding nearly 5% permeates into other risky assets, including the crypto complex and A hawkish Fed trajectory, that targets to reduce price levels, is softening the appeal of price increased hedge assets.

News from Thursday stated that the Russian central bank had proposed a ban on the use and mining of cryptocurrencies is another possible factor for the drop in Bitcoin and other major cryptocurrencies.

The central bank mentioned threats to financial stability, citizens’ wellbeing, and its monetary policy sovereignty for the proposal. However, the central bank’s head of financial stability, Elizaveta Danilova, said that the restrictions on owning cryptocurrencies could happen in the future.

According to the data collected from the Cambridge Bitcoin Electricity Consumption Index, Russia is the third-largest country for Bitcoin mining, after the US and Kazakhstan. Russia accounted for about 11.2% of the hash rate on the Bitcoin network. The hash rate is defined as the amount of computing power that is used by machines for transacting and mining the Bitcoin network.

Bitcoin broke out of its recent range to the downside, which led to the weakness in cryptocurrencies. Recently, the break of $40,000 saw the cryptocurrency plunge as low as $38,300 and take other significant cryptocurrencies with it. Ethereum fell back below $3,000 (down 8.6%), while Avalanche, Cardano, Solana, fell by over 9%, respectively.

Also Read: British-based Fintech Company, Revolut, adds Stock Trading to its App

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