Crypto markets, like the larger equities markets, have been volatile in recent weeks. Bitcoin, the king of cryptocurrencies, has fallen from roughly $69,900 in November to $35,000 today, as investors flee riskier and speculative assets. The digital sector's downturn was exacerbated further by margin holdings that investors had to liquidate in order to pay off their margin debts during the selling binge.
The latest collapse in crypto markets cost them about $1 trillion in market value, with bitcoin losing nearly $600 billion. Bitcoin dipped 7.2 percent during the weekend, trading as low as $34,042 on Saturday before recovering back above the $35,000 barrier. During the same time frame, Ethereum fell by 12%, while Cardano and Solana fell by roughly 17%.
Moving forward, digital assets are expected to remain volatile as the Fed announces its monetary policy for the next months and hints at how it intends to hike interest rates in the near future. Furthermore, according to rumours, Washington intends to announce its strategy for dealing with cryptocurrencies as early as February and will request that authorities begin assessing the benefits of the digital industry against its risks.
