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Over the past week, the collective cryptocurrency market has lost tens of billions of fiat dollars. Bitcoin briefly turned negative over the year yesterday, before recovering later today. At the time of publication, the price of major cryptocurrencies was ~ $ 34,000 while Ether was at ~ $ 2,000. Coins are down around 13% and 18%, respectively, on the week.
The catalyst / culprit (choose your fighter)
The news (and, apparently, the massive sell-off) is a new set of anti-crypto measures in China. Authorities in the Sichuan, Yunnan and Inner Mongolia regions cracked down on crypto miners on Sunday, ordering them to cease operations. In some cases, officials have asked utility operators to shut off power to mining farms.
The next day, the People’s Bank of China ordered payment processors and other financial institutions to restrict services to anyone who trades, uses, or holds cryptocurrencies. This isn’t exactly new news, but rather a continuation of a trend already underway. Why the repression?
It is difficult for the state to exercise control over decentralized blockchain technology. China is rolling out the digital yuan, its own CBDC (central bank digital currency). And that’s not all.
The crypto market has been lighting warning fires of exuberance and market excess for quite some time. These signs include, but are not limited to:
A utility-less dog cryptocurrency reaching a market cap of over $ 3 billion. Were talking, of course, about Shiba Inu. Dogecoin, the dog OG’s crypto meme, is down about 67% from its all-time high (but is up 40% in the past 24 hours) .QB Tom Brady changing his Twitter avatar to mean crypto in crowd, eyes laserNasty technical indicators, like the cross of death, which appeared in commercial models
We know that we shouldn’t try to predict what will come next, but as we wrote earlier this month, a crypto winter could come. These cyclical phases tend to undermine less serious blockchain development projects, while more dedicated teams continue to build.
Zoom out: One in five American adults say they own a crypto, according to Morning Consult data released yesterday. That number may have dropped since the investigation was conducted, as not everyone has diamond hands.
Still, familiarity with crypto is on the rise. From January to June of this year, the number of American adults who say they are familiar with crypto rose from 30% to 37%, per Morning Consult.RD
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