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Bitcoin, ethereum, Ripple XRP, Solana and Cardano prices plunge in $250 billion crypto crash

Crypto investors were lulled into a false sense of security after a steady three weeks, but now cryptocurrency has plunged again.

A major cryptocurrency crash has wiped away the gains made in the last three weeks, sending the values of the digital tokens plummeting to dangerously low levels.

Crypto prices tanked overnight, with the most popular ones falling by as much 13 per cent.

In total, cryptocurrency’s market cap dropped by eight per cent, from US$2 trillion (A$2.7t) to U$1.84 trillion (A$2.5t).

That represents an eye-watering loss of US$160 billion. (A$215b).

Terra’s LUNA coin slid the most out of the top 10 crypto tokens, plunging 13 per cent in the past 24 hours, and 28 per cent over the past week.

Avalanche fell by 12.6 per cent, Solana by 13 per cent and Cardano by 12 per cent.

Bitcoin and ethereum, the two most valuable crypto tokens, also took a serious battering.

Ethereum was down 9.7 per cent, worth just US$2,989 at time of writing.

Bitcoin has also massively declined, down eight per cent to come in at US$39,578.

For the past three weeks, cryptocurrency has held steady, particularly bitcoin, so the latest drop has sent shockwaves around the industry.

BTC’s price peaked for the year at $48,200 on March 28 but now, just a few weeks later, it is once again tragic.

Analysts believe crypto investors are spooked as markets around the world lose their steam.

In Asia, the Hang Seng closed down three per cent on the day in Hong Kong, while the Shanghai Composite Index finished 2.6 per cent lower.

Germany’s DAX traded 0.77 per cent in the red at the time of writing, as did London’s stock market.

Australia’s ASX is expected to dip when it opens this morning.

Tony Sycamore, senior market analyst at City Index, said in a note to news.com.au: “Bitcoin has cratered to be trading at $39,446 (-6.36 per cent) in line with the sharp fall in US equities.

“As we continue to note, Bitcoin is a risk asset, tightly linked to the performance of US equities and, in particular, the Nasdaq.

“Both have benefitted from an extended period of ultra-easy monetary policy and excessive liquidity, which is now being hastily removed.”

Another explanation for the drop could be new bans imposed on cryptocurrency as Russia continues to try to evade economic sanctions amid its illegal invasion of Ukraine.

Just before the weekend, the European Union banned the use of cryptocurrency services to Russia.

The new rule blocks deposits to Russian crypto wallets — including popular cryptocurrencies like bitcoin, ethereum, BNB, XRP, cardano, solana and luna.

It came after the European Central Bank president Christine Lagarde warned that cryptocurrencies posed a “threat” to efforts to curb Russia’s economy.

The EU will put “a prohibition on providing high-value crypto-asset services to Russia,” the European Commission announced.

They added: “this will contribute to closing potential loopholes.”

India’s cryptocurrency industry could also be dragging down the overall market.

Crypto research firm Crebaco found trade volumes had dropped massively in the country ever since a new tax rule was introduced on April 1.

India now requires a 30 per cent tax on any profits generated from cryptocurrency transactions and doesn’t allow offsetting gains with losses, according to CoinDesk.

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Cryptos don’t have any underlying value, not even a tulip: RBI Governor


Reiterating his long-standing position, (RBI) Governor on Thursday warned that private pose a big threat to India’s macroeconomic and financial stability.


At the post-policy meeting with the media, Governor Das said that who invest in should keep in mind that they were doing so at their own risk. do not have any underlying, not even a tulip, he said. This was a reference to tulipmania, one of the famous market bubbles and crashes of all time, when speculation drove the value of tulip bulbs to extremes in the seventeenth century.





Private cryptocurrencies are a big threat to our macroeconomic and financial stability, Das said. Cryptocurrencies, which have currency-like character, will undermine RBI’s ability to deal with financial stability issues, he added.


Das’s withering assessment of cryptocurrencies comes at a time when the government has moved to tax gains on crypto transactions at 30 per cent.


Many in the industry viewed this as the government softening its stance on such assets and not banning them outrightly, although a 30 per cent tax on income was a bit on the higher side, many had opined. However, they were happy with the fact that at least the government was warming up to the idea of this asset class.


Looking at the magnitude and frequency of transactions in virtual assets, Finance Minister Nirmala Sitharaman decided to tax the income from crypto transactions. She also proposed to provide for Tax Deduction at Source (TDS) for payment made in relation to transfer of virtual digital assets at the rate of 1 per cent to capture the transaction details.


Previously, the RBI governor had stated that the number of users logging into cryptocurrency platforms was “highly exaggerated”. Accounts are being opened for investments as low as Rs 500. Moreover, the central bank received feedback that credit was being provided to open the accounts and boost the numbers. These small-value consist of 70-80 per cent of the investor base of these platforms, the governor had said earlier. But he also acknowledged that the value of investments in cryptocurrencies had increased in the country.

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UK govt cracks down on misleading cryptocurrency ads to protect consumers


The UK government on Tuesday joined a slew of nations in cracking down on misleading ads to protect


The country has joined Spain, Singapore and India in an effort to reign in advertisements that promise wild returns.





The UK Treasury published a consultation response, saying that proposed legislation will also provide the UK financial watchdog, the Financial Conduct Authority (FCA), powers to regulate the crypto market more effectively.


“Around 2.3 million people in the UK are now thought to own a crypto-asset with their popularity rising – but research suggests that understanding of what crypto actually is is declining, suggesting that some users may not fully understand what they are buying. This poses a risk that these products could be mis-sold,” the Treasury said in a statement.


The UK authority plans to bring crypto-assets within the scope of financial promotions legislation.


It means the “promotion of qualifying crypto-assets will be subject to FCA rules in line with the same high standards that other financial promotions such as stocks, shares, and insurance products are held to,” said the UK Exchequer.


“Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that are not being sold products with misleading claims,” said Rishi Sunak, Chancellor of the Exchequer.


“We are ensuring are protected, while also supporting innovation of the crypto-asset market”.


The decision to bring these types of advertisements into the scope of regulation will mitigate the risks of consumer harm, ensuring people have the appropriate information to make informed investment decisions.


Spain earlier Singapore and India, stressing that the advertising of crypto-assets must be clear, balanced, fair and explain risks to the public.


Spain’s National Securities Market Commission issued new guidelines, to come into force from February 17, that mandates the following warning to be placed on all crypto ads: “Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost”.


The aim, said the Spanish watchdog, is to ensure that the advertising of the products offers true, understandable and non-misleading content, and includes a prominent warning of the associated risks.


Earlier, Singapore warned and digital token providers not to promote or advertise their digital tokens via various media platforms to the general public.


In new guidelines, the Monetary Authority of Singapore (MAS) said that digital payment token (DPT or more commonly known as cryptocurrency) service providers should not promote their DPT services to the general public in Singapore.


The Indian government in November last year raised concerns over crypto ads promising wild returns.


Indian crypto players bombarded the public with advertisements across platforms — doubling down on their marketing spend when the cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.


The much-awaited ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, did not make it to the table during the Winter Session of Parliament amid growing concerns over the misuse of digital coins on the Dark Web for terror acts and drugs trafficking by militant organisations, and for money laundering and hawala-based transactions.


–IANS


na/shb/

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

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