KEY POINTS:
- The crypto market sector suffered a substantial dip this week as investor sentiment turned sour.
- The downturn was driven due to reason such as the SEC’s recent lawsuits, and fears that liquidity will become scarce.
- The progress made by the crypto market since the start of the year is beginning to flip the other way.
Bitcoin, Ethereum and a slew of other major crypto currencies fell sharply this week as both inflation and the lawsuits being faced by Binance and Coinbase weighed heavily on investor sentiment. However, towards the end of the week, investors began to feel slightly more positive. This week, the price of BTC and ETH have fallen by 1.3% and 4.5% respectively – with many alt coins falling by significantly more. The total market cap of the crypto sector has fallen by 6% over the past week, with its value now teetering on the edge of sub-$1tn.
A combination of macroeconomic headwinds and a renewed regulatory crackdown seems to have brought the crypto bears back out in force, with liquidity beginning to dry up. Bitcoin, the indicator-species for the health of the crypto sector, is now sitting at a price of around $25,576, with some analysts suggesting that the price of BTC could end up somewhere in the range of $23,500 before long.
The tokens which were named as securities in the SEC’s lawsuit against Binance and Coinbase, including Cardano (ADA) and Solana (SOL) have been most significantly affected, dropping by 30% and 28.5% respectively since the beginning of the month. And after a promising start to the year for the crypto sector, the macro trend is beginning to show a flip towards the other direction. Investors will be wondering whether this can be considered a bump in the road or an indication of the sector’s performance for the remainder of the year.
(About Bitcoin)
Bitcoin is the original decentralized digital currency that was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. It operates on a decentralized peer-to-peer network, meaning that transactions can occur directly between users without the need for intermediaries like banks. Bitcoin uses cryptography to secure transactions and to control the creation of new units of the currency. Transactions are recorded on a public ledger called the blockchain, which allows anyone to verify the validity of a transaction and the ownership of bitcoins. The total supply of bitcoins is limited to 21 million, which is expected to be reached around the year 2140. Bitcoin’s price is highly volatile, and it has experienced numerous boom and bust cycles over the years.
