The sharp decline in Bitcoin and other cryptocurrencies increased the anxiety of individual investors.
A devastating wave of sales has also engulfed Bitcoin. In the 24-hour period from Friday to Saturday, the cryptocurrency lost almost $10,000, or more than 17%. Bitcoin was trading at $57,000 on Friday morning before plummeting as Wall Street stocks fell. However, there was no clear reason for the cryptocurrency’s decline, which accelerated overnight Saturday. Cryptocurrencies have far higher volatility than stocks or government-issued money. Other cryptocurrencies plummeted substantially at the start of the weekend, indicating that investors are avoiding riskier investments. This has increased the pressure among small investors for their risk tolerance and account balances at brokerage firms.
The hawkish turn from the Fed and the Omicron variant led to a meltdown of more than 10 percent in the market cap of cryptocurrencies, $50 billion in startups, and a 14 percent meltdown in the stock basket popular with small investors via social media. Since the emergence of the Omicron, cryptocurrencies have witnessed unstable trading, mirroring the volatility of global financial markets.
The Covid Omicron variant has been found in 38 nations, up from 23 two days earlier, according to the World Health Organization, with early evidence suggesting the strain is more contagious than delta.