Ethereum joins crypto plunge: Second largest digital currency loses 20% of its value in 24 hours

The price of Ethereum, the second-largest digital coin, has plummeted in the last day during a major crash of the cryptocurrency market.

Cryptocurrencies have sharply declined in value during the past few days amid fears that downturns across financial markets will lead to global recession.

Having traded as high as £1984.76 yesterday, Ethereum’s price has now hit £1425.60 – losing more than 20 per cent of its value in just a day. 

Unlike crashes of recent years, this latest plunge seems to be linked to a slowdown in traditional markets. 

The crash comes amid a widescale downturn for financial markets that is affecting even US tech stocks – with Amazon down from £2468.75 one month ago to £1725.19 today (a 30 per cent drop).

Bitcoin, the most-famous cryptocurrency, has lost 11.24% of its value to now sell for £21,910.97 – after hitting an all-time high of £56,330 just six months ago.

Nearly all of the value of Terra (LUNA), a stablecoin, was wiped out overnight with suicide hotlines pinned to the currency’s Reddit page as a result of the 98 per cent drop.

LUNA was once in the top-10 values for cryptocurrencies just months ago. 

Stablecoins are supposedly less volatile cryptocurrencies which are pegged to real-world currencies such as the dollar – but UST (the stablecoin behind LUNA) lost its peg to the dollar on Tuesday and has crashed as a result. 

The NASDAQ experienced its sharpest one-day fall since June 2020 earlier this week and the crypto hit implies an increasing integration between crypto and traditional markets.

The crypto downturn has wiped more than $1.5trillion dollars of value from the markets but investors will still be hoping that prices will be able to rally as they have done in the past. 

More to follow…