$250 billion wiped off cryptocurrency market as bitcoin lost 25% of its value; crashes from near $42,000 to $32,576 in just 24 hours
As the saying goes, what goes up must come down–the same is true for Bitcoin. After surging to an all-time high of about $42,000, Bitcoin, the largest cryptocurrency, plunged over 12% from a day earlier to $32,576 as investors beginning to take profits, causing a plunge in prices.
As of the time of writing, one Bitcoin is trading at $35,828.06. The sell-off in major cryptocurrencies comes after a huge rally and perhaps signals some profit-taking from investors. One crypto expert said the $40,000 price level could have been a trigger for people to sell.
Simons Chen, executive director of investment and trading at cryptocurrency financial services firm Babel Finance said in a statement, “the correction we saw was expected as we believe the BTC price surge recently from under $20,000 to $40,000 in the past four weeks will induce sell pressure,” per CNBC.
To date, Bitcoin is still up over 300% in the last 12 months. Last week, the world’s most popular cryptocurrency hit an all-time high of near $42,000 for the first time.
Meanwhile, Britain’s financial watchdog, The Financial Conduct Authority (FCA), warned about the dangers of investing in cryptocurrency, just a few days after bitcoin’s price soared to new record highs. In a statement on Monday, FCA warned people about the risks of putting their money into crypto-assets such as bitcoin.
“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the FCA said. “If consumers invest in these types of product, they should be prepared to lose all their money.”
The FCA said crypto investors were unlikely to qualify for protection under the financial services compensation scheme and could not seek redress through the financial ombudsman service.