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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Biden executive order on cryptocurrency expected this week

President Joe Biden is expected to sign an executive order on cryptocurrency this week that will mark the first step toward regulating how digital currency is traded

Two people familiar with the process said the executive order on cryptocurrency was expected to be issued this week and it had been in the works long before the war. Both people spoke on condition of anonymity to preview the order.

The order is expected to describe what government agencies, including the Treasury Department, need to do to develop policies and regulations on digital currencies. It is expected to include a request for the State Department to ensure that American cryptocurrency laws are aligned with those of U.S. allies and will ask the Financial Stability Oversight Council — which monitors the stability of the U.S. financial system — to study illicit finance concerns.

Additionally, the order will explore the possibility of a new central bank digital currency. The Federal Reserve issued a paper on the topic in January that explores the risks and benefits of U.S.-backed digital currency.

Implicit in the order will be that cryptocurrency will remain a part of the U.S. economy for years to come. The White House’s plans to move forward with the executive order were first reported by Bloomberg News.

While U.S. officials have played down the significance of cryptocurrency to Russia’s ability to evade sanctions, it remains a concern.

“We will continue to look at how the sanctions work and evaluate whether or not there are liquid leakages and we have the possibility to address them. I often hear cryptocurrency mentioned and that is a channel to be watched,” Treasury Secretary Janet Yellen said last week.

A senior administration official who spoke on condition of anonymity said the president’s national security team has already been on the lookout for the use and creation of front companies and alternative financial institutions that Moscow might try to employ to get around sanctions.

Crypto is one of several spaces that the Biden administration is looking to shore up as it tries to make certain that sanctions on Russia have maximum impact. The official said past experiences in Iran and Venezuela with sanctions evasion are informing the administration’s efforts. Additional export controls and new sanction targets are also expected to be unveiled in the days and weeks ahead to counter Russian sanction evasion efforts, the official said.

On Monday, Treasury’s Financial Crimes Enforcement Network issued an alert advising financial institutions to be “vigilant” against any efforts to evade sanctions in connection with Russia’s war in Ukraine.

“Although we have not seen widespread evasion of our sanctions using methods such as cryptocurrency, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people,” Acting Director Him Das said in a statement.

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Bitcoin price: Crypto market plummets over $200 billion as world governments step in

The cryptocurrency market has suffered another “chaotic” 24 hour period, with $200 billion wiped off the market overnight.

The cryptocurrency market has suffered another brutal day, losing over $200 billion in value over the past 24 hours with major coins copping the worst of the crash.

Bitcoin and Ethereum, the world’s two most-traded digital assets, went into another freefall on Wednesday, with smaller coins BNB, Solana, Cardano and XRP also suffering significant losses.

Bitcoin’s price crashed almost 10 per cent over the last 24 hours, dropping to under $54,000 (AUD) for the first time in well over six months.

The price of ethereum, BNB, solana, cardano and XRP also experienced significant drops of between 7 to 11 per cent in the last 24 hours.

Still in its relative infancy, the cryptocurrency market has faced similar tumultuous periods where large chunks of value disappear overnight.

Experts in the field believe values have dropped as a result of the US Federal Reserve raising rates in 2022, alongside heightened pressure from China and Russia to stifle digital currency trading within their borders.

The Chinese government’s widespread crypto ban in 2021 saw the country expel those who use high-powered computers to mine new coin. The result sent bitcoin and crypto prices spiralling, with the downward trend continuing steadily in the first few weeks of 2022.

“I think the main reason for this is the market being spooked by the Federal Reserve raising rates this year, but when the stock market sees some relief, I expect a strong squeeze to the upside for bitcoin and the whole market,” analyst at UK-based broker GlobalBlock Marcus Sotiriou wrote this year.

The wild west nature of the crypto sphere has attracted millions of new investors buying in over the past 12 months. A brief period in early 2022 saw Bitcoin break new ground, soaring to over $80,000 AUD per coin after Elon Musk’s persistent endorsement of the revolutionary technology.

CEO and Co-founder of Mudrex Edul Patel says the current dive-bomb, which he believes has come from a lack of demand amid soaring inflation in the West, has left casual investors in a state of panic.

“The downward trend is likely to put investors in a chaotic situation. The fall of significant cryptos can be attributed to lower demand, inflation, and seasonality. The coming week would be vital for the crypto spectrum,” he told the Economic Times.

In Russia, life is about to get a lot harder for those deep in the crypto sphere, with the government making serious moves against what has become a $7 billion yearly market in the country of 143 million.

According to a report released by the country’s central bank on Thursday local time, cryptocurrency mining and trading goes against Russia’s green agenda and can be used in money laundering or to finance terrorism.

Cryptocurrency has a lot in common with a pyramid scheme, according to the bank, which also called for crypto rule breakers to face the full penalty of the law.

Although the bank’s suggestion to clamp down on cryptocurrency is just that — a suggestion — Russia appears to be fast-tracking parliamentary sessions so that a potential ban could come into effect as soon as possible.

Speaker of the lower house of parliament Vyacheslav Volodin revealed this week that politicians were creating a regulatory framework on cryptocurrency that will be ready in time for the Russian parliament’s spring session.

Under the proposal, cryptocurrency wouldn’t be able to be created, mined or traded on Russian soil — including blocking customers from using crypto exchange platforms.

Russians with offshore accounts would still be able to trade cryptocurrency.

If Russia’s proposal to go ahead, it would be a major blow to the cryptocurrency market around the world.

Russian citizens make up the third-largest number of crypto miners, behind the US and Kazakhstan.

Blockchain miners have made the most of Russia’s unique resources to maximise their mining, with people flocking to the country’s north and Siberia to mine blockchain, because power is cheap over there.

“Potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including in Russia,” the central bank said.

But according to the research team at CoinCDX, India’s largest crypto trading platform, digital assets have endured years of similar suppression from world governments, tipping the decentralised currencies to rise again in the future.

“As Russia-one of the largest crypto adopters in the world-announced its plans for a blanket ban on crypto, the digital asset market plunged back into the reds. BTC and ETH took sharp dips, dropping 2.54% and 3.62% respectively over the past 24 hours,” CoinCDX said in a statement.

“Other altcoins from BNB, ADA, and SOL also nosedived with yet another economic powerhouse taking a hard stance against crypto.

“While this may be a cause for concern, the crypto industry has weathered through multiple bans, restrictions and regulatory scrutiny over the years but have stood the test of time.

“Looking back at how the sector bounced back shortly after China’s crypto ban, we can expect the sell-off to have little long-term impact on crypto’s performance besides this brief initial dip.”

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