The price per dropped below $45 thousand per coin, prior to the opening of the U.S. financial market this week. There are a few possible reasons for the crypto decline including this week’s upcoming two-day Federal Reserve meeting where it’s expected that the Fed will talk about slowing its liquidity policy, calls for more crypto regulation, and a possible U.S. tax hike to pay for trillions in proposed social programs from Democrats in power.
Another contributing factor could have been the fact that last Friday represented a “triple-witching” day. That’s where options – contracts to buy or sell assets on a future day at a certain price – expired across three different asset types: stocks, stock indexes, and stock index futures. Friday’s expiry date involved trillions in traded assets under contract.
Lastly, global financial markets are responding negatively to news out of China that the world’s largest real estate asset manager – China Evergrande Group – could default on loan payments this week following new laws in that country restricting the size of real estate holdings. Evergrande’s stock plunged 10% on Monday morning trading, representing a 15% decline since the beginning.
Whatever was the reason for the latest cryptocurrency sell-off the vast majority of the top-20 cryptos have fallen in value over the last 48 hours. The only stablecoins that are in the green were the stablecoins. Today, El Salvador’s President took to Twitter (NYSE 🙂 to inform the world that they were adding Bitcoin to their Bitcoin portfolio.
El Salvador made Bitcoin legal tender earlier in the month. While there were some delays in the launch and protests about the move to digital currency, more than 1 million citizens have downloaded Chivo from the country’s digital wallet. This is the first official adoption of Bitcoin.
On The Flipside
- Cryptocurrencies are not yet fully insulated from turmoil occurring in traditional financial markets, which can further compound the volatility that already exists within the crypto-space.
What are you supposed to care?
It could be an important week for cryptocurrency. According to the New York Times, the U.S. Federal Reserve considers stablecoins a threat to economic viability in countries all over the globe. Regulation is already being considered. Further crypto falls could be triggered by a Fed announcement this week against stablecoins.
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