Chaos in the crypto market, investors lost Rs 12 lakh crore in 24 hours

The stock market or commodity market hasn't been as devastated as the crypto market. The price of Bitcoin, the world's largest cryptocurrency, is steadily declining. 

Its price is below $90,000, a result of which is being felt across the overall cryptocurrency market. This is why the cryptocurrency market cap has lost $130 billion, or approximately ₹12 lakh crore, in the past 24 hours. Let us explain the current level of Bitcoin prices and the overall cryptocurrency market.

Bitcoin plunges, $130 billion wiped from the market

On December 15th, Bitcoin was trading at $89,608, a decline of 0.60% over the past 24 hours. This has reduced the total cryptocurrency market cap by more than $130 billion, or approximately ₹12 lakh crore. 

Consequently, the total market cap has fallen below ₹3 lakh crore, or $2.98 trillion. In the morning session, the world's largest cryptocurrency fell to $87,996 and reached a high of just above $89,923.

Riya Sehgal, research analyst at Delta Exchange, said in a media report that approximately 116,000 traders closed their trades, resulting in total losses exceeding $295 million. 

This indicates high leverage and weak market sentiment. Bitcoin is stable between $87,500 and $91,000, indicating bearish sentiment, while Ethereum is fluctuating between $2,900 and $3,180, trading approximately 37.5% below its lifetime high.

Turmoil in other cryptocurrencies as well

Other cryptocurrencies are also experiencing volatility. Over the past 24 hours, Ethereum saw a 0.23 percent increase in ETH, a 0.73 percent decrease in ADA, a 0.21 percent decrease in SOL, a 0.82 percent increase in XRP, and a 0.50 percent decrease in BNB.

Sehgal further stated that Bitcoin's failure to hold the $90,000 support level signals a change in Bank of Japan policy, which will historically reduce global liquidity.

This will also put pressure on risk assets. He added that each interest rate hike by the Bank of Japan since 2024 has led to a 20-30 percent drop in Bitcoin, and traders are once again taking a defensive stance. Over the past 24 hours, the market has declined by 1.01 percent, bringing the monthly decline to 4.83 percent.

Why is the crypto market under pressure?

WazirX founder Nischal Shetty, quoted by Moneycontrol, said that global markets are caught between signs of softening in the West and growing pressure in Asia, creating a drag on risky assets, including crypto.

Expectations of further interest rate cuts by major Western central banks are improving liquidity conditions. The announcement of crypto regulations by the UK Treasury Department has added a new level of optimism.

But across Asia, markets are retreating from risky assets, driven by equity market trends, rather than their potential role in alternative assets, Shetty said. 

Structural reforms, favorable demographics, and rising domestic consumption could be conducive to long-term crypto adoption in Asia. For now, the former remains cautious and awaits favorable conditions.