Bitcoin drops below $ 30,000 as regulatory fears simmer

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Bitcoin fell below $ 30,000 for the first time in weeks as the cryptocurrency falters amid economic and regulatory concerns.

On Tuesday, the digital asset was valued at around $ 29,500 per coin, down 3.3% in the past 24 hours. Ethereum hovered around $ 1,745, Ripple plunged 5.5% to $ 0.52, and Cardano fell more than 7% to land at $ 1.04.

The losses come on top of Bitcoin’s recent disgrace, which began after its mid-April peak of over $ 63,000. Ethereum peaked at over $ 4,100 in early May before starting its descent. Much of these losses are related to regulatory issues coming from China, where much of the world Bitcoin and other cryptocurrencies are mined.

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The United States is considering increased regulation in the cryptocurrency arena, with Treasury Secretary Janet Yellen meeting with key regulators, including Federal Reserve Chairman Jerome Powell, to discuss a plan to regulate so-called coins. stable. The stock market had its worst day in months on Monday, sparking anxiety among investors looking to buy high-risk assets.

That same day, Yellen met with the Task Force of Presidents on Financial Markets, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. She told the meeting that the country needs to act quickly to implement a regulatory framework for stablecoins, according to the Treasury Department.

Stablecoins are cryptocurrencies whose value is tied to another asset class, such as gold or fiat currency, and whose value does not fluctuate as strongly as that of digital assets like Bitcoin. Powell also recently discussed the regulation of stablecoins during testimony before Congress.

David Sacco, practitioner-in-residence in the finance department at New Haven University, told the Washington Examiner that this week’s latest plunge cannot be directly attributed to a cause but rather concerns about Chinese regulations, the talks on US surveillance and nervous markets, among other factors.

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Sacco said investors are looking at the landscape and realizing that there are quite a few different cryptocurrencies to invest in and some positive news (like El Salvador adopting Bitcoin), but that they are associating themselves with the fact that ‘there is a lot of uncertainty related to the regulatory environment.

Cryptos have now become just another high-risk financial asset class and respond to the same things as the rest of the markets, he said. There is never a single thing that drives these market movements.

To mine Bitcoin, powerful computers are used to create platforms that verify virtual coin transactions. Many of these platforms are located in China. Prices fell in May after Chinese Vice Premier Liu He called for a crackdown on bitcoin mining and trading behavior and resolutely preventing the transmission of individual risk to the social realm. China’s central bank also said it had called on banks and payment institutions to crack down more on trading in digital assets.

China is not alone in its crypto crackdown. In Malaysia, authorities recently confiscated over 1,000 Bitcoin mining rigs and ceremoniously destroyed them with a steamroller after police accused the miners of stealing electricity. The platforms alone were valued at some $ 1.26 million.

Monday’s decline of less than $ 30,000 comes after the Dow Jones Industrial Average fell about 725 points and lost more than 2% of its value on the same day.

Sacco pointed out that Bitcoin is a risky asset class, like speculative stocks and commodities, adding that whenever there is a bad day in the market, people want to invest in safer assets. which is generally bad for risky assets.

I’m sure part of this has to do with the market taking a dip and what that means for risky assets in general. Because when that happens, people switch from risky assets to low risk assets, things like Treasuries, he said, stressing that he avoids blaming one-day moves on. any market has only one news item because there are so many factors to play.

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The last time Bitcoin fell this low, on June 22, it caused the cryptocurrency to enter what investors are calling a death cross, which occurs when a short-term moving average of a stock falls below its long-term moving average.

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Tags: News, Bitcoin, Cryptocurrency, Financial markets, China, Regulation, Janet Yellen

Original author: Zachary Halaschak

Original location: Bitcoin drops below $ 30,000 as regulatory fears simmer

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