Analysts reveal the main reason for the record drop in most digital assets

The record drop in cryptocurrencies has caused concern among investors. Analysts point to the correction of the Japanese stock market as the main cause of the crisis.

After a sharp decline in stocks in Japan, massive sales of cryptocurrency assets began. The Japanese Nikkei 225 index fell by 7%, continuing the downward trend that began when the Bank of Japan raised its key interest rate to the highest level in 16 years.

The BOJraised the interest rate to 0.25%, up from a previous range of 0% to 0.1%. This is the highest rate since 2008 and is part of a plan to tighten monetary policy, including a reduction in purchases of Japanese government bonds. Shortly after the market opened, the Nikkei index fell by more than 2,400 points. Within an hour, it fell by 12.3%, losing about 1900 points. This caused a chain reaction in the global digital asset market.

Financial experts believe that investors are looking for safe assets in times of instability. They transfer funds to traditional currencies and gold. The market decline is also associated with rising interest rates in the United States. This has made investments in cryptocurrencies less attractive.

As a reminder, bitcoin suffered a significant drop, falling by 17% within a few hours. The price of the cryptocurrency market’s flagship fell to $ 50,300. At the moment, the value of BTC reached $ 49,800. The cryptocurrency’s fall coincided with the stock market’s collapse. Investors began to sell their assets en masse, fearing a further decline.