A major cryptocurrency crash has wiped away the gains made in the last three weeks, sending the values of the digital tokens plummeting to dangerously low levels.<\/p>\n<\/div>\n
Crypto prices tanked on Monday night, with the most popular ones falling by as much 13 per cent.<\/p>\n
In total, cryptocurrency\u2019s market cap dropped by eight per cent, from US$2 trillion (A$2.7t) to U$1.84 trillion (A$2.5t).<\/p>\n
That represents an eye-watering loss of US$160 billion. (A$215b). <\/p>\n
Terra\u2019s LUNA coin slid the most out of the top 10 crypto tokens, plunging 13 per cent in the past 24 hours, and 28 per cent over the past week.<\/p>\n
Avalanche fell by 12.6 per cent, Solana by 13 per cent and Cardano by 12 per cent.<\/p>\n
Bitcoin and ethereum, the two most valuable crypto tokens, also took a serious battering. <\/p>\n
Ethereum was down 9.7 per cent, worth just US$2,989. <\/p>\n
Bitcoin has also massively declined, down eight per cent with a 24-hour low of US$39,275.80. <\/p>\n
At time of writing both coins are still down trending.<\/p>\n
For the past three weeks, cryptocurrency has held steady, particularly bitcoin, so the latest drop has sent shockwaves around the industry. <\/p>\n
BTC\u2019s price peaked for the year at $48,200 on March 28 but now, just a few weeks later, it is once again tragic. <\/p>\n
Analysts believe crypto investors are spooked as markets around the world lose their steam.<\/p>\n
In Asia, the Hang Seng closed down three per cent on the day in Hong Kong, while the Shanghai Composite Index finished 2.6 per cent lower. <\/p>\n
Germany\u2019s DAX traded 0.77 per cent in the red at the time of writing, as did London\u2019s stock market.<\/p>\n
Australia\u2019s ASX is expected to dip when it opens this morning. <\/p>\n
Tony Sycamore, senior market analyst at City Index, said in a note to news.com.au: \u201cBitcoin has cratered to be trading at $39,446 (-6.36 per cent) in line with the sharp fall in US equities. <\/p>\n
\u201cAs we continue to note, Bitcoin is a risk asset, tightly linked to the performance of US equities and, in particular, the Nasdaq. <\/p>\n
\u201cBoth have benefitted from an extended period of ultra-easy monetary policy and excessive liquidity, which is now being hastily removed.\u201d<\/p>\n
Another explanation for the drop could be new bans imposed on cryptocurrency as Russia continues to try to evade economic sanctions amid its illegal invasion of Ukraine.<\/p>\n
Just before the weekend, the European Union banned the use of cryptocurrency services to Russia. <\/p>\n
The new rule blocks deposits to Russian crypto wallets \u2014 including popular cryptocurrencies like bitcoin, ethereum, BNB, XRP, cardano, solana and luna.<\/p>\n
It came after the European Central Bank president Christine Lagarde warned that cryptocurrencies posed a \u201cthreat\u201d to efforts to curb Russia\u2019s economy.<\/p>\n
The EU will put \u201ca prohibition on providing high-value crypto-asset services to Russia,\u201d the European Commission announced.<\/p>\n
They added: \u201cthis will contribute to closing potential loopholes.\u201d<\/p>\n
India\u2019s cryptocurrency industry could also be dragging down the overall market.<\/p>\n
Crypto research firm Crebaco found trade volumes had dropped massively in the country ever since a new tax rule was introduced on April 1.<\/p>\n
India now requires a 30 per cent tax on any profits generated from cryptocurrency transactions and doesn\u2019t allow offsetting gains with losses, according to CoinDesk<\/a>. <\/p>\n