$1.9 trillion wiped off the market as cryptocurrency prices go into free fall

Cryptocurrency has shed half its value since its November highs and there are fears it hasn’t even hit bottom yet.

Bitcoin has had a horror few days, with the blockchain’s price sliding by 20 per cent in the past week.

The coin’s current 24-hour low was a staggering US$34,784 (A$48,300), representing a decline of 50 per cent since its November all-time high of US$69,000 (A$96,000).

In all, the cryptocurrency market has lost US$1.4 trillion (A$1.9t) in just two months since its $3 trillion combined market cap last November,

On Monday morning Bitcoin had dropped a tiny bit more, down by 0.1 per cent, now sitting on US$35,239.47.

In fact, Bitcoin’s year to date returns are minus 24 per cent — meaning if you invested at the beginning of the year, you’ve already lost a quarter of your cash.

Other top-ranked cryptocurrency are also feeling the sting, with the second most valuable coin, Ethereum, down by 27 per cent compared to last week.

At time of writing, the ETH blockchain was trading at US$2,413 (A$3300), an almost 30 per cent drop since the start of the new year.

Cardano and Solana and have also fallen drastically over the past seven days, plummeting by 23 per cent and 34 per cent respectively.

BNB Binance is down by 26.5 per cent, Ripple XRP plunged by 22 per cent and hypecoin Doge is suffering a 21 per cent loss in a week.

And experts say it’s going to get worse.

Bitcoin’s price over the last week. Picture: CoinMarketCap

Head of research at Melbourne-based market analyser Pepperstone, Chris Weston, told The Australian that nobody was piling in to buy crypto because it doesn’t seem like easy gains are on the horizon.

“It’s just going down and down, and you’ve got to ask yourself, why would you buy now?” he said.

“You don’t buy when it’s going down; you wait for the price to stabilise.”

The finance pro said that he expected the coin to dip below $US30,000 (A$41,000) before it lost its downward momentum.

He wasn’t the only one to think so.

All the other coins are also in the red zone.

“The mass marketing of bitcoin reminds us of the activity of stockbrokers in the run-up to the 1929 crash,” Paul Jackson, US investment company Invesco’s global head of asset allocation, wrote in a note last week.

“We think it is not too much of a stretch to imagine bitcoin falling below $30,000 this year.”

CEO and Co-founder of Mudrex Edul Patel says the current dive-bomb has left casual investors in a state of panic. This is causing them to cash out and perpetuate the cycle.

“The downward trend is likely to put investors in a chaotic situation. The fall of significant cryptos can be attributed to lower demand, inflation, and seasonality. The coming week would be vital for the crypto spectrum,” he told the

Economic Times.

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It’s not been the best week to have invested in cryptocurrency.

As for the reason behind the seemingly sudden crash, it’s actually been a while in the making.

Crypto investors are panic as stricter regulations on the unusual digital assets hit the market.

The US Federal Reserve raised rates this year and at the same time Russia started floated the idea of banning crypto mining and trading.

The combination of both has caused a price free fall.

Russia, the world’s third-largest centre for bitcoin mining, proposed banning the use and mining (the creation) of cryptocurrencies last week.

According to a report released by the country’s central bank on Thursday, cryptocurrency mining and trading goes against Russia’s green agenda and can be used in money laundering or to finance terrorism.

Under the proposal, cryptocurrency wouldn’t be able to be created, mined or traded on Russian soil — including blocking customers from using crypto exchange platforms.

Were Russia’s proposal to go ahead, it would be a major blow to the cryptocurrency market around the world.

Russian citizens make up the third-largest number of crypto miners, behind the US and Kazakhstan.