Bitcoin Price Falls Below $39k, Reaching a Six-Month Low
Cryptocurrencies across the board went into a free fall overnight, with the Bitcoin seeing its value tumble to its lowest since September 2021, Forbes reported.
Cryptocurrency valuations are highly volatile and even small triggers such as a tweet can see their values soar and dip. However, of late, countries have begun taking a stance either in favor or against, with the latter coming from larger nations in the past. A new entrant of the 'against-clan' has been Russia with its central bank planning to outlaw not only trading but also mining of cryptocurrencies.
In a report released on Thursday, the central bank of Russia proposed a blanket ban on the use as well as the creation of any cryptocurrency, Bloomberg reported. The central bank cited dangers to the Russian economy as well as the environment.
Bloomberg cited Cambridge University's data to state that Russia is the third-largest miner of crypto coins behind the U.S. and Kazakhstan. Most mining operations are located in the north and Siberia where the temperatures are low and cheap power is accessible. The central bank in its proposal also stated that mining jeopardized Russia's environmental efforts and was a risk to its energy supply.
Russia has already prohibited the use of crypto for making payments but also prohibited banks and funds from investing in it, last month. While the ban does not affect investments made by Russians in offshore accounts, even the application of the proposal will require a law to be passed in the Russian parliament.
Forbes attributed the fall in crypto values to waning interest from investors, after Federal authorities increased interest rates and also presented a report of a digital dollar, a crypto-backed currency issued by the central bank. The report suggested that the digital dollar would be a "near-perfect substitute" for bank money and the anticipation of this report has already squeezed out $532 million from crypto markets.
In the past 24 hours, Bitcoin has dropped to around $38,000 while other cryptocurrencies such as Ethereum, BNB, Solana, and XRP have seen a drop between 7-11 percent. Forbes pegged the free fall has wiped out $200 billion from the crypto market, which once rivaled Apple's valuation, in just 24 hours.