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Wednesday, March 22, 2023

Bitcoin pierced $20,000: will it continue to fall?

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The main cryptocurrencies face losses of up to -12% one day after the bankruptcy declaration of Silvergate and that it transcended that JP Morgan broke its link with the exchange gemini. They added advances that the United States would increase taxes on cryptocurrency miners and the possibility of a new rate hike by the Federal Reserve.

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He Bitcoin it loses almost 9.5% in the last 24 hours and falls to US$19,724, its lowest value since January 12 and its biggest daily drop since February 15.

For his part, ethereum it falls more than 10% and operates at u$s1,376. The falls lead her Dogecoin (-11.8%), Ethereum, Bitcoin, Polygon (-9%) and Binance (-7.3%).

The cryptocurrency miners of the United States may have to face a 30% tax on electricity costs according to the president’s latest budget proposal Joe Biden, which to aspire to “reduce mining activity” in the country.

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According to a budget document, any company that uses resources, whether owned or rented, would be “sSubject to a special tax equivalent to 30% of the costs of electricity used in the mining of digital assets”.

“The increase in energy consumption attributable to the growth of digital asset mining has negative environmental effects and may have environmental justice implicationsas well as increasing energy prices for those who share an electrical network with digital asset miners ”, explains the US Treasury.

In parallel, the Federal Reserve (FED) already warned that plans to raise interest rates above forecasts market initials. This caused a collapse of the main indices on Wall Street.

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.”

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.

In addition, the blows of the bankruptcy of Silvergatethe first crypto-friendly bank: “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 Wednesday night.

the american bank JP Morgan ended its relationship with the cryptocurrency exchange gemini, as revealed this Thursday by CoinDesk. The association between both companies dates back to April 2020when the firm led by Jamie Dimon would have accepted the crypto exchange founded by the Winklevoss brothers and Coinbase as clients.

Source: Ambito

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