Cryptocurrency: Expert discusses success of Bitcoin

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Victoria Scholar, head of investment at Interactive Investor, said: “It looks like the bubble has burst as panic selling grips the [crypto] market.” But she added: “Brave traders might use this major repricing as an opportunity to buy the dip.” This came after Bitcoin fell to its lowest level since July, dropping by as much as 10 percent to £25,187.27.

The cryptocurrency has lost half its value since November 2021, when it peaked above £51,000.

The currency has been down by more than 20 percent for the last week.

It has since stopped dropping as dramatically but fell by over four percent across the last 24 hours.

Other cryptocurrencies have felt the impact of this, with Ethereum down almost 30 percent, bringing its value to £1,674.61.

This time last year it was hovering more around the £2,300 mark.

Meanwhile, Cardano is down 35 percent, taking it to a valuation of 72p.

The disruption, not just isolated to cryptocurrency, saw financial markets worldwide suffer a major blow.

The FTSE 100 index fell by 2.6 percent or 196.98 points to 7297.15 while the FTSE 250 dropped 3.6 percent or 810.74 points to 21,452.5.

The drop caused a £68bn fall in the value of Britain’s 350 leading listed companies.

However, the FTSE 100 did recover some ground on Tuesday morning, rising by one percent by 10.30am.

The crash occurred amid mounting fears of conflict in Ukraine, alongside the threat of higher interest rates.

George Godber, a fund manager at Polar Capital, said the “chilling hand” of Vladimir Putin was being felt on the financial markets.

The Bank of England, which raised interest rates from 0.1 per cent to 0.25 per cent in December 2021, is poised to do so again next week.

The US Federal Reserve System has also signalled that an interest rate hike may be on the way.

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Both of these factors can have a negative impact on the stock market, as investors worry it will hamper growth.

Craig Erlam, senior market analyst at trading firm Oanda, said it “could get much worse before it gets better”.

He told the Daily Mail: “It could be a make-or-break week for the markets, with the Fed meeting tomorrow, big tech earnings, and tensions on the Ukraine-Russia border.

“It could get much worse before it gets better.

“The Fed needs to strike the right balance between taking inflation seriously and not wanting to cause further unnecessary turmoil in the markets.

“Not an easy balancing act.”

The Dow Jones Industrial Average dropped more than 1,000 points in early trading yesterday, before recovering in New York.

The impact of the disruption was felt globally, with Russian stocks down by nearly six percent, according to Moscow’s benchmark Moex index – taking losses for the year to 15 percent.

In Europe, markets in Frankfurt, Paris, Milan and Madrid were all down more than three percent.

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