The cryptocurrency market has experienced a sharp decline in the past 24 hours, wiping out more than $40 billion from its total market capitalization. Bitcoin, Ethereum, and Solana were among the worst performers, dropping by 6%, 7%, and 10% respectively.
Bitcoin, the largest cryptocurrency by market cap, failed to sustain its momentum above $27,000 and plunged to as low as $25,800 on some exchanges. The drop came amid reports of a possible regulatory crackdown on crypto exchanges in the US and China, as well as a power outage in Kazakhstan that affected Bitcoin mining operations.
Ethereum, the second-largest cryptocurrency by market cap, also faced selling pressure and dipped below $2,000 for the first time since May. The decline coincided with the launch of Arbitrum, a layer-2 scaling solution for Ethereum that aims to reduce congestion and fees on the network. However, some analysts argued that Arbitrum could also pose a threat to Ethereum’s security and decentralization.
Solana, one of the fastest-growing cryptocurrencies in recent months, suffered a double-digit loss and fell below $30. The Solana network, which claims to offer high-speed and low-cost transactions for decentralized applications, experienced a temporary outage on Tuesday due to a bug in its consensus mechanism. The incident raised questions about Solana’s reliability and scalability.
Other major cryptocurrencies also followed the downtrend, with Binance Coin, Cardano, XRP, Litecoin, and Polkadot losing between 3% and 8%. The only exception was Dogecoin, which managed to gain 2% and reclaim its spot as the sixth-largest cryptocurrency by market cap.
The crypto market is currently in a state of uncertainty and volatility, as investors weigh the risks and opportunities of the emerging asset class. While some experts believe that the current correction is healthy and temporary, others warn that more downside is possible in the near term.
