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Thursday, March 30, 2023

Cryptocrash: Bitcoin has its worst day of the year and is one step away from piercing $20,000

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The price of Bitcoin (BTC) sank to $20,000, with a decline of almost 7% in the last 24 hoursits biggest drop in four months, amid a widespread sale of shares and other assets in the face of global risk aversion and on the other, the product of the collapse of the Silvergate Capital bank.

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With a similar trend as Bitcoin, the rest of cryptocurrencies, such as Ethereum, Polkadot, Cardano, BNB, Tron and others, lost between 4 and 10% in the last hoursdragged down by the bad weather prevailing in the market.

The Federal Reserve (FED) has already warned that it intends to raise interest rates above initial market forecasts. This caused a collapse of the main indices on Wall Street. In fact, the S&P500 – the most important index on Wall Street – had the lowest closing in almost two months.

Besides, Silvergate Capital Corp announced Wednesday that it seeks to cease operations and voluntarily liquidate its bank, although “the bank’s reduction and liquidation plan includes the full payment of all deposits.”

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“In light of recent industry and regulatory developments, Silvergate believes that an orderly winding down of banking operations and a voluntary liquidation of the bank is the best way forward,” the company said in a statement late Wednesday.

However, this is not the only case of the collapse of a large player in the industry, after other large companies such as FTX and Alameda Research have disappeared in recent months.

“It’s hard to make a fundamental case for cryptocurrency here, given the uncertainty that there’s no telling what regulation is coming.”Kara Murphy, chief investment officer at Kestra Investment Management, told Bloomberg.

In global markets, investors are also taking in the likelihood of higher borrowing costs, particularly in the United Statesas Fed officials work aggressively to curb rising inflation.

The possibility of a rise of 50 basis points at the next meeting of the federal committee of the North American central bank on March 21 and 22after the market waited for a 25-point one with a greater possibility until a few days ago, bodes poorly for riskier investments like digital assets.

“Purchasing volumes have fallen recently and are at two-month lows, down 21% in the last seven days,” said Vetle Lunde, a senior analyst at K33 Research.

Although Bitcoin is still 26% above the prices it had at the beginning of the year, it is still a long way from recovering the 64% it lost in 2022.after being hit by the implosion of the Terra stablecoin, the failure of the hedge fund Three Arrows, and the spectacular collapse of the FTX exchange.

Source: Ambito

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