Ethereum joins the cryptocurrency plunge: Second largest digital currency loses 20% of its value in 24 hours as Coinbase warns customers they may lose ALL their money
- Ethereum has plunged 20 per cent in 24 hours as part of the latest crypto crash
- Bitcoin has also plunged 11.24 per cent as investors suffer heavy losses
- Even so-called ‘stablecoins’ such as Luna have seen major losses
- Despite the downturn, traditional tech stocks are faring even worse
- Amazon has lost 30 per cent of its value in just one month of trading
The price of Ethereum, the second-largest digital coin, has plummeted 20 per cent in the last day during a major crash of the cryptocurrency market.
Cryptocurrencies have sharply declined in value during the past few days amid fears of downturns across financial markets with highly-valued US tech stocks down sharply too including Amazon, which has fallen 30 per cent in a month.
Having traded as high as £1984.76 yesterday, Ethereum’s price has now hit £1425.60 – losing more than 20 per cent of its value in just a day.
The crash is affecting many digital coins with Bitcoin, the most-famous cryptocurrency, losing 11.24% of its value to now sell for £21,910.97 – after hitting an all-time high of £56,330 just six months ago.
Unlike crashes of recent years, this latest plunge seems to be linked to a slowdown in traditional markets.
Nearly all of the value of Terra (LUNA), a stablecoin, was wiped out overnight with suicide hotlines pinned to the currency’s Reddit page as a result of the 98 per cent drop.
LUNA was once in the top-10 values for cryptocurrencies just months ago.
Stablecoins are supposedly less volatile cryptocurrencies which are pegged to real-world currencies such as the dollar – but UST (the stablecoin behind LUNA) lost its peg to the dollar on Tuesday and has crashed as a result.
The NASDAQ experienced its sharpest one-day fall since June 2020 earlier this week and the crypto hit implies an increasing integration between crypto and traditional markets.
The crypto downturn has wiped more than $1.5trillion of value from the markets but investors will still be hoping that prices will be able to rally as they have done in the past.
WHAT ARE CRYPTOCURRENCIES?
A cryptocurrency is a digital currency that can be used for transactions online.
It is the internet’s version of money – unique pieces of digital property that can be transferred from one person to another.
All crytocurrencies use ‘blockchain’ and one can only be made and shared using specific agreed-upon rules. For each cryptocurrency the rules are slightly different.
Bitcoins are lines of computer code that are digitally signed each time they travel from one owner to the next. Physical coins used as an illustration
People can buy bitcoins through exchanges such as Coinbase and Bitfinex.
Bitcoin was the first cryptocurrency, created in 2009.
Other currencies such as Litecoin and Dogecoin do the same thing but have slightly different levels of inflation and rules surrounding transactions.
Currently around 270,000 transactions are taking place every 24 hours.
These currencies don’t exist as physical or digital objects. They are just a collective agreement with other people on the network that your currency was legitimately ‘mined’.
Blockchain is the record of changes in ownership of in a currency which is broadcast through the network and maintained by computers around the world.
The network works by harnessing individuals’ greed for the collective good.
A network of tech-savvy users called miners keep the system honest by pouring their computing power into a blockchain, a global running tally of every bitcoin transaction.
As long as miners keep the blockchain secure, counterfeiting shouldn’t be an issue.
However, because cryptocurrencies allow people to trade money without a third party getting involved, they have become popular with libertarians as well as technophiles, speculators — and criminals.
Advertisement
