Crypto Bloodbath Continues, With Bitcoin (BTC) Back To July 2021 Levels

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Things weren’t much better elsewhere. Ethereum (ETH) fell 14.4%, with Crypto.com Coin (CRO) down 14.6%. Friday’s collapse saw as much as $280 billion wiped out before a partial recovery. On that day, the crypto market capitalization dropped by $200 billion.

Central banking and regulatory chatter remain key drivers

Bitcoin and the broader crypto market have been on a downward spiral since November. From ATH’s $68,979 in November, Bitcoin was down 47.1% through Friday’s close. The timing of Bitcoin’s fall coincided with an increase in regulatory chatter and a change in the FED’s stance on inflation and monetary policy.

While the regulatory review had a direct impact, the FED’s forward guidance affected both global equity markets and the crypto market.

Earlier this year, the IMF raised concerns about the interdependence of US stock markets and the crypto market. The IMF comments followed calls from the Bank of England for a global regulatory framework for crypto. However, it is not just about concerns about cryptos and financial stability. On Thursday, a U.S. Congressional subcommittee hearing collected the first opinions of witnesses on the impact of proof-of-work protocols on the environment.

During the hearing, it was apparent that there were two clear sides and no one was sitting on the fence. While there was nothing negative to weigh in on Bitcoin and the crypto market, lawmakers were certainly leaning towards the negative aspects of Bitcoin mining. With news from the SEC also planning to increase oversight, the crypto market is about to go through a tough time.

For the crypto markets, however, it is not just UK and US regulators who have been most active in the crypto space.

This week, there was news from the central bank of Russia proposing to ban cryptos and crypto mining was also negative. According to the University of Cambridge, the Russian Federation accounted for 11.23% of the Bitcoin hashrate in August 2021. Russia’s influence over the Commonwealth of Independent States could also prove detrimental. Kazakhstan is the top Bitcoin mining state, with the world’s 2nd largest hash rate of 18.1% as of August 2021.

For Binance (BNB), the news could not come at the worst time. Earlier this month, news hit Binance sons making strategic hires in Russia and Ukraine.

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