Bitcoin dropped to a 3-month low cryptocurrencies The Monday dip was due to regulatory concerns and global monetary tightening worries.
Bloomberg reported that the world’s largest digital token, Ether was at the edge of its lowest level since 2020 at as low as 6.7%. The price was $18,500 in London at 7:10 AM. Ether, the second-largest cryptocurrency, lost 6.2% while struggling to hold onto the $1,300 mark.
Global investors have been reluctant to invest in risky assets due to regulatory concerns and tightening of the monetary system.
Investors are anticipating volatility from the Federal Reserve’s interest-rate increase, which is expected to occur this week in an effort to reduce price pressures. Bloomberg reported that US equity markets were in red, and that the dollar gauge was moving higher as a sign of market caution.
YLong-term investors (with a 3 to 5 year horizon) may not need to be concerned as Bitcoin will continue to rise as the macroenvironment stabilizes over the next few years.
Although the Ethereum blockchain which underpins the Ethereum token had a major update called the Merge last Wednesday, its value fell amid speculation that US Securities and Exchange Commission Chairman Gary Gensler suggested that the new structure could attract more regulation. Trades relating to the upgrade were also unwound.
The Merge improves transaction processing and reduces energy use. Ethereum went from being a verification system called Proof of Work (PoW), into a “proof-of–stake” system after the Merge was completed.PoS).
A report by Blockchain.News suggests that Gensler may have noticed The Merge and classified it as a security.
Gensler spoke about The Merge and the Howey test. This is a test that courts use to determine whether an asset is a security. He stated that cryptocurrencies and intermediaries that allow holders to “stake” their coins might have to pass that test.
According to CoinMarketCap.com, the global crypto market cap has fallen below $1 trillion.
Bitcoin has been hovering between $18,000 to $25,000. It is unlikely that Bitcoin, the most popular cryptocurrency, will rise to the $25,000 mark in the near term. This is because the Fed’s action. In anticipation of Fed rate hikes, US Bond yields have been increasing. This is bad news for Bitcoin.
With the help of Nicholas Otieno –
Source: Shutterstock
