Friday , July 23 2021

Coinbase Hangover Shocks Bitcoin Falling Crypto Assets



(Bloomberg) –

Coinbase Global Inc. The craze that drove crypto assets to records when it went public last week returned to itself over the weekend, dropping the most bitcoins since February.

The world’s largest cryptocurrency dropped as low as 15% on Sunday just days after hitting a record $ 64,870. It then covered some of the losses and was trading at around $ 57,000 on Monday around 1:25 pm in Tokyo.

The second largest token, Ether, fell below $ 2,000 over the weekend before equating losses as well. The fluctuation has also affected Binance Coin, XRP, and Cardano. According to CoinGecko, the token – the token started as a joke – supported the trend and rose 25% within 24 hours.

The weekend massacre came after a difficult period for the industry, which saw the value of all cryptocurrencies exceeding $ 2.25 trillion amid the craze for everything crypto-related that went to Coinbase’s direct listing on Wednesday. The largest crypto exchange in the USA completed the week with a value of $ 68 billion, higher than the owner of the New York Stock Exchange.

“In retrospect, this was inevitable,” Galaxy Digital founder Michael Novogratz said in a tweet on Sunday. “The markets were very excited about listing $ Coin directly. The basic boom, coins such as $ BSV, $ XRP and $ DOGE are rising. All were signs that the market was going very one way.

With limited use and no foundation, Dogecoin rallied nearly $ 50 billion at one point before stumbling Saturday last week. The online exchange said in a blog post that demand for tokens is so vivid.

Also on Sunday, there was speculation in several online reports that the decline in crypto was related to the U.S. Treasury’s concerns that it could prevent money laundering via digital assets. The Treasury declined to comment, and the Financial Crimes Enforcement Network (FinCEN) said in its e-mail response Sunday that it “did not comment on possible investigations, including whether it exists.”

‘Price to pay’

“The crypto world is waking up today in a somewhat disturbing way,” said Antoni Trenchev, co-founder of the crypto lender Nexo. Dogecoin’s 100% Friday rally became the ‘top party’ after the Bitcoin record and Coinbase listing earlier in the week. There was enthusiasm in the air. And often in the crypto world, there is a price to pay when this happens. “

Along with the “unconfirmed” report on the US Treasury’s pressure, Trenchev said the factors for the declines could include “excessive leverage, Coinbase insiders abandoning stocks after direct listing, and a mass cut that hits Bitcoin miners in Xinjiang province”, Trenchev said.

The increasing general acceptance of cryptocurrencies spurred Bitcoin’s rally and lifted other tokens to record highs. Bitcoin’s most ardent proponents see it as a modern store of value and inflation protection, while others fear a speculative bubble is forming.

Interest in crypto rose again after companies from PayPal to Square began trading Bitcoin on their systems, and Wall Street firms like Morgan Stanley began providing access to tokens to some of the wealthiest customers.

Volatility

This is despite ongoing concerns about their volatility and usefulness as a payment method. In addition, as the investor base expands, governments are looking more closely at risks around the industry.

Federal Reserve Chairman Jerome Powell said last week that Bitcoin “looks a bit like gold” because it is a tool for speculation rather than payment. In January, European Central Bank Governor Christine Lagarde targeted Bitcoin’s role in facilitating criminal activity, saying the cryptocurrency provides “funny things”.

Turkey’s central bank, the level of anonymity behind the digital tokens “recovered” by saying that bringing the risk of losses, has banned the use of crypto currency as a payment method from April 30.

(Updates the prices in the second and third paragraphs.)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay one step ahead of the most trusted source of business news.

© 2021 Bloomberg LP


Source link