The Bitcoin Price Plummets As Wall Street Crashes

Bitcoin is a decentralized digital currency with no central bank or single administrator and can be sent from user to user via the peer-to-peer Bitcoin network without the need for intermediaries.

Bitcoin and other cryptocurrencies fell sharply on Saturday, in another sign that investors are retreating from risky bets following this week's stock market selloff.

Bitcoin, the largest cryptocurrency by market capitalization, was trading at $48,125.67 at around 12:30 p.m. ET market value fell more than 12% in 24 hours on Saturday, according to CoinDesk data. By midnight, the price had plummeted to $42,000, then recovered. Ether, the second-largest cryptocurrency, fell more than 7% on Saturday afternoon. Bitcoin fell 12% to $47,495 as of 9:20 a.m. Japan time. It fell to $41,967.5 during the session, bringing the total loss for the day to 22%.

The widespread decline in cryptocurrencies also caused Ether, the coin linked to the Ethereum blockchain network, to drop by more than 10%.

Based on cryptocurrency data platform Coingecko, the market capitalization of the 11,392 coins it tracks fell by almost 15 percent to $2.34 trillion. Its value briefly exceeded $3 trillion last month, when Bitcoin hit an all-time high of $69,000. The crash comes after a volatile week for financial markets. Global stocks and benchmark U.S. Treasury yields fell on Friday after data showed slowing U.S. job growth in November and the Omicron variant of the coronavirus spooked investors. did.

Justin Danesan, head of exchange sales at Hong Kong-based cryptocurrency exchange EQONEX, has observed the rise in leverage ratios in the crypto market and large holders moving coins from wallets to exchanges. He said there was. The latter is usually an expression of intent to sell.

"The whales in the crypto industry appear to be leveraging the bullish bias and leverage of individual traders to move coins to trading venues and drive prices down," he said. The decline was the result of a Dec. 8 U.S. House Financial Services Committee meeting with executives from eight major crypto companies, including Coinbase Global Chief Financial Officer Alecia Haas and FTX Trading CEO Sam Bankman Fried. This was conducted prior to the testimony.

The hearing will be the first time major companies in the cryptocurrency market will testify before U.S. lawmakers as policymakers grapple with the impact of cryptocurrencies and how best to regulate them.

Last week, the U.S. Securities and Exchange Commission rejected a second proposal from WisdomTree for a Spot Bitcoin exchange-traded fund.

Data from another platform, Coinglass, revealed that around $1 billion worth of cryptocurrencies were liquidated in the past 24 hours, with digital exchange Bitfinex accounting for the bulk of that liquidation.

“If anything, this is an opportunity for many investors who previously felt they missed the boat.” “We see Tether being bought at a premium, which suggests that people in the cryptocurrency industry have the cash to do just that,” Danesan said. He mentioned stablecoins, which are cryptocurrencies.

A sharp drop in Bitcoin funding rates (the cost of holding Bitcoin through perpetual futures, which reached 0.06% in October) also showed that traders were becoming bearish.

Cryptocurrency trading platform BitMEX’s funding rate fell to -0.18% from the 0.01% level for most of November.

Bitcoin plunged 5.5% to $53,435.9 as of 22:04 Japan time on Friday, down $3,112.06 from its previous close.

Bitcoin, the world's largest and best-known cryptocurrency, is down 22.6% from its annual high of $69,000 in November. Ten.

Ether, a coin linked to the Ethereum blockchain network, fell 6.81% to $4,208.68 on Friday, down $307.35 from its previous close.

Bitcoin lost a fifth of its value on Saturday as a combination of profit-taking and macroeconomic concerns drove sales of various cryptocurrencies to nearly $1 billion.

Bitcoin fell 12% to $47,495 (E41,980.83) as of 9:20 p.m. Japan time. During the session, the price fell to $41,967.50 (E37,095.07), taking the total loss for the day to 22%. The widespread decline in cryptocurrencies also caused Ether, the coin linked to the Ethereum blockchain network, to drop by more than 10%.

Based on crypto data platform Coingecko, the market capitalization of the 11,392 coins it tracks fell by almost 15 percent to $2.34 trillion (E2.07 trillion). Its value briefly exceeded $3 trillion (2.65 trillion euros) last month, when Bitcoin reached an all-time high of $69,000 (60,989 euros).

Why did the market collapse? The crash came after a volatile week for financial markets. Global stocks and benchmark U.S. Treasury yields fell on Friday after data showed slowing U.S. job growth in November and the Omicron variant of the coronavirus spooked investors. did.

Justin Danesan, head of exchange sales at Hong Kong-based cryptocurrency exchange EQONEX, has observed the rise in leverage ratios in the crypto market and how large holders are moving their coins from wallets to exchanges. He said there was. The latter is usually an expression of intent to sell.

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