After an explosion in value, the crypto market has spiralled downwards.
Bitcoin has tumbled to $56.864.90 after reaching a record high of $69,000 less than a week ago.
That's an almost 4% dip in just 24 hours.
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The crypto crash hasn't just hit Bitcoin, the entire market has slipped.
Ether, the second largest cryptocurrency, also fell by more than 4% to $4,075.
Memecoins Dogecoin and Shiba Inu saw even bigger crashes.
Dogecoin fell more than 5% to $0.22 while Shiba Inu plunged 10% to $0.000043.
The trend is seen in other cryptocurrencies such as Stellar, Solana and Cardano.
Overall, the cryptocurrency market lost more than $200 billion in value overnight, settling around $2.6 trillion.
The market had been enjoying consistent rises for the past few weeks, so what's happened?
Why is Bitcoin down?
There's not one reason for the crash, it's likely to be caused by a variety of factors.
Bitcoin specifically has been hit by the news that the US Securities and Exchange Commission (SEC) has rejected a bitcoin exchange-traded fund (ETF) after seven months of reviewing the application.
The VanEck Bitcoin ETF would have directly tracked the price of bitcoin. It could have stimulated the price of the digital currency, but the SEC ruled that not enough had been done to demonstrate how it could prevent fraudulent trading.
Another major factor is that Chinese regulators have clamped down harder on Bitcoin mining.
Bitcoin mining is the process of creating new bitcoins through solving extremely complicated maths problems.
Mining is bad for the environment, as it requires huge amounts of energy and creates lots of e-waste because it is done on specialised hardware.
This is part of the reason why China is moving to outlaw mining operations from the country, where much of the industry is based.
Meng Wei, spokesperson for China’s National Development and Reform Commission, said that crypto mining is an “extremely harmful” industry that gets in the way of China’s pursuit of carbon neutrality.
To mitigate it, they are considering hiking up electricity prices for some crypto mines.
Why is the whole crypto market crashing?
As Bitcoin is the biggest cryptocurrency, its value has a knock on effect on smaller coins.
Alongside the reasons outlined above, Twitter’s CFO Ned Segal also publicly denounced crypto, which could have affected investor decisions. He said that investing in crypto “doesn’t make sense” right now.
Experts also predict that Bitcoin could continue to plummet.
Matthew Dibb, COO and co-founder of Stack Funds, told CoinDesk that they “have noticed some larger sales occur on Bitfinex as well as openings of new short positions.”
He continued: “While liquidations so far are quite low by historical standard and funding rates are approaching flat, we could see a further cool-off in BTC for the short term as momentum is beginning to stall.”
Is it worth investing in cryptocurrency?
In short, investing in cryptocurrency is risky.
The market is new, and volatile. It is hard to predict what will happen next: while it may rise for a week, it can suddenly crash.
This latest crash has wiped out most of the gains made throughout the pandemic which had come from a flurry of investments, more options to pay for things using Bitcoin and hype around meme coins.
There's no guarantee that you will make a profit on any money you invest in crypto, and there's a chance you can lose it.
Nobody can completely predict where the industry will go, and the market value is susceptible to the opinions of experts, government decisions and - sometimes - tweets by Elon Musk, so it's worth keeping that in mind.
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