On Wednesday, cryptocurrency markets witnessed a downturn, with major currencies crashing rapidly, wiping off as much as $1 trillion from their valuations, which had hit a record high of more than $2 trillion recently.

Many analysts seem to believe that the crypto bubble, which grew without reason or rhyme or unsustainably for some time now, is finally bursting. Also, crypto investors watched in horror as the markets fell significantly, leaving big crypto exchanges like WazirX and others crashing under extremely high transaction volumes.

Today, the crypto market saw a major correction with prices of important currencies, including Ethereum, Bitcoin and others crashing as much as 21% and 32% respectively within 24 hours.

Odds of adverse changes

It all started when CEO Elon Musk announced that Tesla Inc. won’t be accepting bitcoin payments for its cars, given the disastrous energy consumption trends involved in its mining. Later, he also explained that the firm won’t liquidate its existing stake in bitcoins worth $1.5 billion. His recent tweet announces that Tesla has diamond hands.

China forbids crypto adoption by financial sector, trading

But, it was China, the biggest hub of cryptocurrency trading and mining worldwide that reduced the global digital currency market spirit by forbidding all major players in the financial space to engage in crypto-related services and products. Insurance, transactions and derivatives trading around virtual currency were prohibited by the nation. This all came along with a warning to stay away from the same, in view of the rise in speculative crypto trading. However, market experts were sure of this as a precautionary measure.

Vitalik Buterin’s announcement

Add to all this, Vitalik Buterin, the co-founder of Ethereum’s announcement of the destruction of 90% of his Shiba-Inu holdings and donating the rest. Having said that, it is easy to understand why the crypto world is in turmoil. As of now, 40% of Shiba-Inu tokens amounting to 410 trillion coins worth $7 billion have been made inaccessible to the public or burnt.