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Crypto carnage: $93bn is wiped off market in a single day

By Lawrence Gash

Bitcoin leads the plunge, dropping more than 40 per cent on Thursday, March 12

The cryptocurrency market has suffered one of its worst 24 hours on record, losing more than $93bn (£73bn, €83bn) in value.

The world’s leading digital asset Bitcoin (BTC) led the way falling by around 40 per cent. Having started on Thursday, March 12, at just under $8,000 it closed the day at around $4,800, wiping all of its gains since Spring 2019.

Other cryptos suffered similar plunges, with XRP down more than 42 per cent and Ethereum (ETH) falling by as much as 49 per cent.

While the fall in cryptocurrencies mirrored a wider sell-off in equities as markets continue to react to the Covid-19 crisis, the sheer scale of Bitcoin’s plunge has called its reputation as “digital gold” into question.

Since its inception in 2008/9, one of the currency’s unique selling points was its separation from central bank influence and thus its potential as a hedge against economic uncertainty.

Investors continue to flock to traditional safe havens such as gold, US treasuries and the Japanese Yen (JPY), but as yet are giving Bitcoin a wide berth.

Those defenders of BTC’s potential as a digital safe haven would still point to the currency’s finite supply as cause for hope. Whereas governments and central banks throughout the world are expected to try to print their way out of the ongoing crisis, there are, and only ever will be, 21 million Bitcoin on Earth.

With the next "halving" soon approaching, in which the number of Bitcoin produced via mining reduces by 50 per cent, some traders and investors are taking advantage of the crypto’s sudden plunge.

By mid-morning (GMT) in Friday trading the leading crypto has gained by more than 10 per cent to stand around $5,539.

Only time will tell whether those "buying the dip" will be vindicated.

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