Bitcoin and other altcoins crash on Russia crypto ban worries
Bitcoin and other cryptocurrencies plunged on Friday as concerns about regulations and high-interest rates remained. BTC, the biggest coin in the world, declined to about $38,000 while Ethereum fell below $2,800. In total, the market capitalization in the industry declined to about $1.9 trillion.
The main reason why Bitcoin and other altcoins crashed was increasing fears on regulations. In the past few months, some countries have made announcements on regulations.
For example, it is widely known that India is considering banning all cryptocurrencies in the country.
Similarly, in 2021, China announced measures to ban mining and use of all cryptocurrencies, Banks and other financial entities were ordered to stop facilitating the industry. This was a notable thing because the number of Chinese cryptocurrencies has been rising.
The latest country to hint at major regulatory changes is Russia. In a statement on Thursday, the country’s central bank argued that the government should ban all cryptocurrencies and mining activities.
The bank highlighted a few points. First, it argued that cryptocurrencies were interfering with the bank’s monetary policy. Unlike fiat currencies, most cryptocurrencies have a structured way in which they are produced.
Second, the Bank of Russia argued that cryptocurrencies were encouraging cybercrime. And finally, it noted that mining was detrimental to Russia’s climate change goals.
Cryptocurrencies have also crashed because of the ongoing changes in monetary policy. Most major central banks have announced a change in tone recently.
For example, in the UK, the Bank of England (BOE) has already started hiking interest rates. It made a 25 basis point hike last year and is expected to implement several more hikes this year.
In the US, the Federal Reserve has hinted that it will end its quantitative easing policy this year and then implement at least three rate hikes this year.