Are we in grip of ‘crypto winter?’

Investors told they could ‘lose it all’ as billions are wiped off digital currencies

THE global digital currency market went into meltdown yesterday as fears of a ‘crypto winter’ sent investors into a panic – with the value of some assets falling by as much as 99 per cent.

Bitcoin, the original cryptocurrency, has lost nearly a third of its value so far this year, while Ethereum, the world’s second most valuable digital coin, is down more than 40 per cent.

Other crypto assets have sufhigh

‘Rude awakening for investors’

fered even worse falls, with Luna – another large digital currency – plummeting by more than 99 per cent in a single day.

The global cryptocurrency market has lost nearly £330billion since the start of this week.

Regulators repeatedly warned investors of the risks of putting cash into cryptocurrencies, with the Financial Conduct Authority saying this week that people should be ‘prepared to lose all the money’ they invested.

Many ignored the warnings, and were lured by the promise of returns. It was estimated earlier this year that nearly ten million Britons owned some form of cryptocurrency. They now face a ‘rude awakening’, analysts have warned. Susannah

Streeter, from investment firm Hargreaves Lansdown, said: ‘Fears about rampant inflation and the abrupt ending of the era of cheap money have sent cryptocurrencies careering down a cliff edge.’

Cryptocurrencies are a form of digital money to be invested in.

They use mathematics to create unique pieces of computer code.

They soared in value during the pandemic as low interest rates encouraged investors to buy riskier assets. But investors have started fleeing the market with fears over the global economy, inflation and rising interest rates. The crash in the price of Luna wiped out the fortunes and savings of multiple crypto investors.

It is now changing hands for less than $1 (80p) having been worth over $80 (£65) a week ago.

Ethereum has tumbled 21 per cent this week while Bitcoin dropped 13 per cent to its lowest price since July 2021.

Some analysts are worried about a repeat of the ‘dotcom bubble’ in the early 2000s, when the increase in computer and internet access led to large-scale speculative trading in internet companies – before the bubble burst.