The volatility of Bitcoin and cryptocurrencies have come into play as the former crashed as much as 21% over Sunday and Monday.
This is its biggest two-day decline since March, although the cryptocurrency is still up roughly 89% on a trailing one-month basis. Ethereum fell 12%. Smaller coins XRP and Litecoin shed around 18% each.
Consequently, it led to the wiping off nearly $140 billion in total market cap of cryptocurrencies. Last week, the overall value of the cryptocurrency market hit above $1 trillion for the first-time-ever.
Bitcoin last week hit a record high above $41,000, swept up by a combination of a weaker dollar, economic optimism, and a wave of bullish sentiment towards cryptocurrencies, as big-name investors and investment banks touted its potential for huge gains this year.
Additionally, Political uncertainty was mounting, knocking investors risk appetite for assets such as stocks and commodities, as the Democrats’ prepared to impeach Trump for a second time, following his perceived incitement of a right-wing mob that stormed the Capitol building last week.
Bitcoin and other cryptocurrencies – much like many commodities – tend to do the opposite of whatever the dollar is doing.