Why is the cryptocurrency market down today?

CRYPTOCURRENCIES including Bitcoin, Ethereum, BNB, Cardano and XRP have faced a tough year, with fluctuating values and more.

The price of Bitcoin has gone down by about 5%, for example, in just the past 24 hours.

On Friday, May 6, the cryptocurrency was down to just $36,141.33, according to Coinmarketcap.

The stock market overall is down as investors sell risky assets, and the values are tightly linked, meaning a dip all round.

In the past day, Ethereum is down more than 4%, Cardano has fallen almost 5% and Solana has fallen 6.31% to be exact.

XRP and BNB aren't struggling quite so much, but they are down 0.57% and 2.92% over the past 24 hours respectively.

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The latest plunge follows a crypto crash at the start of December, shortly after Bitcoin hit a record value of $69,000 in November.

One trader lost $5billion after the price of bitcoin plummeted in December, highlighting the risks of investing in crypto.

And in another recent blow to the market, Crypto.com users were unable to access funds due to "unauthorised activity" on some accounts.

Last year users of cryptocurrency exchange Binance were unable to access their cash after suspending UK withdrawals.

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And Etoro customers were locked out of their accounts after the service went down during a crypto crash.

Crypto.com has also created its own digital coin with the same name, which plunged as much as 5% after the suspension was announced.

But some of the more modern currencies like Dogecoin have seen slight spikes of revival the other way in recent weeks.

It's seen a hike thanks to Elon Musk and his investment in social media platform Twitter.

The meme cryptocurrency jumped by over 20% last week, after the announcement that the site will be purchased by the Tesla CEO.

But it has dipped again in the past day, as the value dropped by less than 1% to roughly $0.1274 according to Coinmarketcap.

Crypto volatility

Cryptocurrencies are highly volatile, meaning their values often make large swings with no notice, as the latest plunge shows.

Investing in cryptocurrency is a very risky business.

You can be left with less money than you put in, and could even lose it all – even if you spend on what appears to be a safe bet.

You might not be able to access your investment if platforms go down and you could be left unable to convert crypto back into cash.

There have also been warnings around scams related to cryptocurrencies, with people losing vast sums of money.

You should never invest in something you don’t understand and you should never put in money that you can't afford to lose entirely.

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Why have crypto markets been down?

Cryptocurrencies have been especially volatile lately and there a few reasons why.

Twitter's chief financial officer Ned Segal said at the end of last year that investing in crypto "doesn't make sense right now", causing concern among Silicon Valley buyers.

China also announced plans to clean up virtual currency mining, according to CNBC.

Many crypto-mining regions in China are now radically reducing operations.

Previous moves by the country to crackdown on mining and trading of crypto has previously sent markets plunging.

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And the unrest in Eastern Europe has contributed to the fall because investors tend to shun risk-sensitive assets during uncertain times. 

From Dogecoin and Litecoin to Bitcoin – here are the different cryptocurrencies explained.

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