Crypto: More than $1 trillion Market Value Wiped in Meltdown

The price of bitcoin (BTC) has dropped below $35,000 per bitcoin in the last 24 hours, falling about 10%, while the prices of other top 10 cryptocurrencies such as Ethereum, BNB, solana, cardano, and XRP have also dropped.

Bitcoin has now dropped to its lowest level since late January, with Ethereum and U.S. stock futures following suit. After a poor start to the year, Bitcoin had been trading above $40,000 for the majority of the month. Bitcoin's price fell below $34,000 in January, the lowest it had been since July 2021.

This has been the stock market's worst month since March 2020, and persistent signs that the Federal Reserve would begin hiking rates at its next meeting in March in an effort to combat inflation, have all contributed to Bitcoin's recent price fall. Meanwhile, government officials have expressed a desire for more regulation and engagement in digital currencies, including the creation of a government-issued digital currency.

Bitcoin has hovered between $33,000 and $50,000 in the days since nearly reaching $52,000 on December 27.

Despite the recent downturn, Bitcoin started 2022 on a high note, with a robust November and early December period that gave way to the current negative trend. After beginning the year in the $30,000 level, Bitcoin rose steadily throughout the year, reaching an all-time high of $68,000 on November 10th.

Many experts still believe Bitcoin's price will eventually soar above $100,000, describing it as a matter of when, not if. Shortly after Bitcoin's most recent all-time high in November, Ethereum's price surpassed $4,850, setting a new all-time high.

The recent crypto price meltdown has wiped $500 billion from the combined crypto market in only one week, bringing it down to unseen levels since last week.

Russia-Ukraine Tension

The crash of Bitcoin in the wake of rising geopolitical tensions between Russia and Ukraine has tarnished its image as "digital gold" and a hedge for investors in times of crisis.

The price of bitcoin fell further as global markets responded with anxiety to the growing scope of the battle in Ukraine, with missiles pouring down on Kyiv's capital city and its airport being overrun by airborne troops.

"Bitcoin is performing in lock step with other so-called 'risk assets' as Russia’s invasion of Ukraine sends global financial markets into a tailspin," the trading team of the bitcoin and crypto exchange Bitfinex wrote in an emailed note. "Markets across the board are dancing to the tune of geopolitical events."

The United States, the United Kingdom, and several of their allies have already placed economic sanctions on Russia, with more coming in response to Russian President Vladimir Putin's nighttime commencement of a "special military operation" in Ukraine's eastern Donbas region. Dmitry Medvedev, Russia's former prime minister, has previously stated that cutting Russia off from SWIFT would constitute a declaration of war.

What does this mean for Crypto Investors?

Price fluctuations are to be expected for individuals who invest in crypto for the long-term utilizing a buy-and-hold approach. According to Humphrey Yang, the personal finance expert behind Humphrey Talks, big dips are nothing to be concerned about, and he avoids reviewing his own accounts during dangerous market dips.

Cryptocurrency experts suggest that crypto investments should make up less than 5% of your whole portfolio.  According to Bill Noble, chief technical analyst at Token Metrics, a cryptocurrency analytics platform, if you've done that, don't worry about the swings since they'll keep happening.