What Is Happening To The Cryptocurrency Market
The COVID-19 pandemic shut down most of the world during the first half of 2020. While some economies began to reopen, the United States has seen a resurgence in COVID-19 cases in June and July that could crash growth during the second half of the year. Most experts agree that the economy will see a series of starts and stops until a vaccine arrives.
New COVID-19 Cases in the United States â Source: Google/Wikipedia
Compounding the pandemic-led market rout, crude oil prices fell sharply during the first half of the year following a disagreement between Russia and Saudi Arabia. Prices have rebounded to about half of their prior highs over the past two months, but low demand for energy could cap gains over the coming months until demand starts to resurface.
Despite the dire economic situation, the benchmark S& P 500 index rebounded from a low of 2,237.40 in late March to 3,232.39 in early Juneânear their pre-COVID highs. Many investors believe that the economy could quickly snap back after a vaccine is developed, as evidenced by the rebound in unemployment between April and June.
What Is Happening With Cryptocurrency Today Bitcoin Is Moving To An Important Event
If you ask what is happening to cryptocurrency today, you will see that the main news is about BTC halving. However, until then, still many things will have happened. During the last month, bitcoin has experienced extreme volatility. It was connected with instability in the economical and financial fields. The price for one coin was fluctuating from around 4,000 USD up to 9,000 USD per coin.
Now, when the situation is becoming more complicated, and the financial institutions, such as US Federal Reserve, the Reserve Bank of Australia, and the European Central Bank have announced easing measures to fight with the crisis, the bitcoin stays a safe asset for investors because no more coins can be generated than it is embedded in the algorithm.
The bitcoin is moving to the third halving in its history. It is scheduled for the 13th of May. After it, miners will get half of the present award for every mined coined.
Usually, every halving is supposed to create coin deficiency in the market. Hence, the price of the coin starts growing. Now, experts still doubt whether the bitcoin price is going to grow like it was all the time. However, the bitcoin, most likely, will not drop lower than 3,000 USD per coin. The reason for that is simple: this is the minimum price for which miners would work. If the price drops lower, miners will not get any profit for mining coins.
Largest Evaporations Since September 2021
The cryptocurrency market witnessed one of the largest wipeouts in a few months, where assets worth $2.4 billion were liquidated. In the last 24 hours, the trading volume of cryptocurrency in the global market has surged to over $218 billion, which is an 80% increase. The overall market cap of crypto on December 4 has plummeted to $2.07T, which is over 17% down from the market cap on December 3, 2021. It simply means that due to ear of the depreciation of digital assets, investors have been trading to secure profits or simply exit the market to avoid total loss in case of a ban or other restrictions.
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A Battle Of Devaluation
Others, among them many bitcoiners, are asking the question: How has money gotten to this point? In order to answer this question one has to go back to 1971, when the dollar, as the last national currency, was cut off from gold. Perhaps surprisingly, government currencies did not crash to zero at that time rather they moved to a system of free exchange rates.
Whereas the yellow precious metal had previously served as an anchor of value and price, henceforth a battle of national currencies was unleashed. This battle turned out to be quite costly. The different exchange rates of individual currency pairs led to an increase in currency risks. The latter increased transaction costs for international trade, which continue to weigh heavily on global trade to this day, representing a globally inefficient barter system on a national currency level.
Merchants, companies and politicians reacted to this situation. Within the political sphere, the U.S. dollar developed into the global unit of account for oil and other commodities due to U.S. hegemony being the strongest economic power around the globe. To this day, the U.S. dollar continues to function as an international reserve currency. In this way, the greenback facilitates global trade, but due to its importance it also let the U.S. exploit what is called its privilège exorbitant. The sheer dominance of the dollar and the advantages for U.S. markets are impressive.
Be An Informed Investor
Ive long cautioned readers from buying cryptocurrencies because they have seen it rise and just want to make a quick buck. The past two months have led to a tremendous surge in public interest, with mainstream news like CNBC and CNN explaining how to invest in bitcoin and other cryptocurrencies.
Just make sure youre doing it for the right reasons. Buy cryptocurrency to learn about it and transact with it. Or buy it because you are betting that this new technology will change the world by:
- Supplanting gold as the main store of value in the world
- Transforming inter-bank settlements
- Making international remittance affordable
- Revolutionizing the fundraising and IPO process
These are just a few options, and if youre in tune with the cryptocurrency world, youll know the opportunities are endless. So if youre going to buy cryptocurrency, do it because you see the long-term vision , not because you think it will blindly appreciate and give you a good return on your investment.
The author holds bitcoin and Ethereum and other smaller cryptocurrencies.
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Cryptocurrency Performance During Covid
Cryptocurrencies werenât spared from the effects of the COVID-19 pandemic and collapse in crude oil prices. Like many other liquid asset classes, traders and investors sold assets to generate cash during uncertain times. According to market data, a subsequent drop in prices eventually attracted contrarian and momentum traders that bid up prices over the past two months.
- Bitcoin prices fell 66.5% from their 52-week highs before rising 128.2% from their lows. Prices are now just 23.6% off of their all-time highs.
- Ethereum prices fell 67.2% from their 52-week highs before rising 155.5% from their lows. Prices are now just 16.1% off of their all-time highs.
- Litecoin prices fell 76.4% from their 52-week highs before rising 75% from their lows. Prices are still 58.8% off of their all-time highs.
On the other hand, stable coins managed to maintain their value throughout the crisis and saw an influx of volume. Tether and USD Coin traded near their $1.00 per coin benchmark priceâeven as demand for stable coins soared during the height of the crisis. Many investors could turn to these coins as a liquid cash alternative during uncertain times.
And Now The Exchanges
Last night, one of the largest mainland China exchanges, BTCC, announced that it would be suspending operations by the end of the month.
Earlier this afternoon , ViaBTC, another exchange, also announced the closure of its exchange.
One by one the others, like Huobi and OKcoin, will follow.
The process will be as orderly as possible. If there are any exchanges that have been running fractional reserves, and badly , then the last thing the regulators want is to trigger a bank run on an exchange which ends up not being able to pay back its customers.
After last nights BTCC announcement, we saw another heavy round of selling, with bitcoin falling another 15 percent, and second largest cryptocurrency ethereum fall by around 17 percent.
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What Happened To Cryptocurrency Market Today If We Check Other Cryptocoins
Of course, under other cryptocoins we mean relevant cryptocoins that have been forming the market along with bitcoin. When you are asking about what happened with cryptocurrency today, you cannot ignore Ethereum. Some people are still asking whether Ethereum is better than bitcoin and if yes, then what advantages it has. Ethereum is not better or worse. It is completely different. It is a platform that is used in many different ways. Ethereum is known mostly for its smart contracts. They allow developers to program their own functionalities.
For now, the Ethereum price constantly grows. At times, the ethers grow in price even higher than bitcoins. It might be due to the fact that Ethereum is not only a kind of cryptocurrency but much more.
What Happened To Crypto Today And What Should You Expect Tomorrow
Thus, when you check what happened with cryptocurrency today, and in general what is happening now, you will see that it is being influenced by the general depressive mood. But if you consider the fact that some exchanges and major brokers have already announced a boost in trading volumes, we can expect rapid growth of cryptocurrency prices. There are several reasons to believe so:
- Cryptocurrency is decentralized, nobody can print more coins than there are initially embedded in an algorithm
- Cryptocurrency functions everywhere and is available everywhere
- Crypto coins prices do not depend directly on something like oil, gold, and similar. Their prices depend on the market and users
- Cryptocurrency is highly scalable
- The main crypto coins are not prone to the main inflation reasons. Thus, they are a much safer investment than fiat money.
Of course, the time of cryptocurrency hasnt come yet. It is still not mature enough to replace powerful banking systems based on fiat money. But if we analyze thoroughly what happened with cryptocurrency today, we can see that it might be the future of the financial world.
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Is There Another Investigation
Yeah, according to Bloomberg. Its about bank fraud, with possible criminal charges.
This investigation doesnt particularly worry Alan Konevsky, the chief legal officer of tZERO, a security token trading platform. This was a company that was trying to figure out how to get off the ground in a fairly hostile financial services climate where they couldnt even open a bank account, he says. A lot of crypto companies have had difficulty trying to open bank accounts. Some of the problems Tether has experienced may be due to regulatory uncertainty, he says.
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Crypto Prices Jump As The Russia
Bitcoin and other cryptocurrency prices are jumping following a plunge this week in the value of Russia’s currency a sign, according to some analysts, that Russian investors are shifting their money out of the ruble as economic sanctions against the country for its invasion of Ukraine take hold.
Bitcoin on Wednesday rose to $44,188 after falling as low as $36,370 last week. Other leading cryptos, including ethereum, ripple and solana, were either flat or saw gains of at least 2%.
Meanwhile, the ruble plunged to a record low against the dollar on Monday, dropping to under 1 U.S. cent, and has hovered there since.
Investors are “trying to get out of the ruble” after its “drastic devaluation after all the sanctions,” Bendik Schei, head of research at Norway-based Arcane Research, told CBS MoneyWatch.
“Under the current market conditions, I’m not surprised to see investors at least those in Russia seeking stablecoins,” Schei said. Stablecoins are seen as less volatile than cryptocurrencies because the value of the underlying crypto is fixed to a traditional currency like the U.S. dollar or a hard asset like gold.
Another factor that may be pushing up crypto prices is growing unease among some younger investors about government actions that affect currency prices, including this week’s economic sanctions against Russia.
Shiba Inu Coin And Other Memecoins Rocket Up In Latest Crypto Market Surprise
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Shiba Inu coin is one of several meme coins to have seen astonishing price gains in 2021
Shiba Inu coin and other meme coins have seen dramatic surges in their value, in the latest shakeup of the crypto market.
Over the last day or so, many traditional cryptocurrencies have seen positive returns. Bitcoin and ethereum, the two largest, are both up around 2.5 per cent over the last day, capping off high returns over the last week.
But those modest gains looked small when compared with other meme coins, such as Shiba Inu coin, or SHIB, which is up 23 per cent over the last day. The cryptocurrency has gained almost 34 per cent over the last week, and almost $3 billion worth of the coin has been traded over the last 24 hours.
The other more traditional dog-themed cryptocurrency, dogecoin, also saw outsized gains. It is up 6.3 per cent over the day, and 14 per cent over the week.
And other, smaller canine cryptocurrencies saw similarly strong performances. Floki Inu a cryptocurrency named after Elon Musks own shiba inu dog has gained almost 15 per cent over the last 24 hours.
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So What Uh Happens Now
Well, theres a possibility that regulation of cryptocurrency changes certainly the rumblings from the Treasury Secretary and the head of the SEC suggest that regulatory changes are coming.
But one way to make Tether unnecessary is to create a digital dollar, and some US lawmakers seem to be warming to the idea, including Senator Elizabeth Warren . A digital dollar would drive out all of the dollar-pegged stablecoins, because that would mean zero counterparty risk, Mizrach says. Thats the biggest risk to Tether, he says.
Tether, naturally, disagrees: We think its positive that governments are taking inspiration from private stablecoins, and especially Tether, as the most innovative, liquid, trusted, and popular stablecoin. We believe theres room in the space for both CBDCs and private stablecoins like Tether.
Li views central bank digital currencies as inevitable. I just hope they bring a level of transparency, he says. He also wants lower fees on transactions. Its ridiculous that its 2021 and we still pay 2.9 percent fees to process transactions in the traditional world. Its robbery.
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Demand for Bitcoin and Ethereum, the two largest cryptocurrencies, has waned into the end of the year amid rising interest rates, tighter liquidity and shifting regulatory stances.
From Bored Ape Yacht Club to CryptoPunks, everyone in the cryptocurrency industry has become aware of the non-fungible token craze following a year of incredible volume, record sales and brand partnerships that look to take NFTs mainstream.
CRYPTO UPDATE The largest cryptocurrencies were mixed during morning trading on Wednesday, with Litecoin seeing the biggest move, rising 2.85% to $150.11. Ripple led the decreases with a 1.
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Is That A Normal Report
We dont know whose commercial paper Tether is holding, and thats a little weird. I asked the company directly and the spokespersons written response was, We are a tech company and we closely guard our counter-party relationships. At this time, we do not disclose the make-up of our commercial paper holdings. That is unusual.
We are the most transparent stablecoin issuer.
Bloombergs Matt Levine made a helpful comparison: this is what JP Morgan discloses on one of its money market funds, and its a lot more detailed than what we got from Tether. You can see the issuer, the specific identification code, how much money is invested, and the market value, among other things, for each holding.
Theres another stablecoin of comparison, and its USDC, which is also pegged to the dollar. Its the second-largest stablecoin, actually! Anyway, USDCs parent company, Circle, is attempting a SPAC. So we got an attestation to its assets: 61 percent in cash and cash equivalents and 9 percent commercial paper. But USDC has its own issues Coinbase had been promising that there was $1 in a bank account backing each token. The attestation showed that wasnt true.
Of the top 10 stablecoins, the most transparent is Gemini, says Mizrach. Its completely backed by dollars in FDIC-insured accounts. Thats the model of transparency, he says. Tether, naturally, would disagree. We are the most transparent stablecoin issuer, the spokesperson told me.
Has Bitcoins Bubble Burst
When assets rise very quickly in price, typically this makes a crash much more likely. Or at the very least a correction, when the price falls back down to a more normal level.
That is the situation bitcoin is in right now. Although no one can really say what is a normal level for bitcoin.
It took the cryptocurrency 11 years from launch to get to $20,000 per coin, but only three weeks for bitcoins price to double from there.
A decisive year for currency was in 2013. The Bitcoin price 8 years ago went from $13.40 at the start of the year to its height in December of $1,156.10, before falling to around $760 three days later.
Fast forward to 2020/21 and the price had soared by more than 700% in 12 months.
Where it is heading next is equally unpredictable.
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