The market is shaky with bitcoin and Ethereum cryptocurrencies falling sharply, 7% and 10% respectively. Stocks also fell. This comes ahead of the US Federal Reserve monetary policy decision this week. The fall is also attributed to SEC Chairman Gary Gensler calling for more crypto regulation and urging crypto exchanges to work with the regulator.
On Monday, bitcoin fell below $47,000 after struggling throughout the weekend to stick to the $50,000 mark. Ethereum, the world’s second most popular cryptocurrency, was down by 10% – below $3,800. In the last 24 hours, BTC was at the $47,028.82 mark, down 4.06% while ETH was at the $3,780 mark, down 5.86%, as per CoinMarketCap.
Analysts say cryptocurrencies continue to be under pressure and will not find a foothold anytime soon. Kaiko, a crypto trading data firm, wrote that when the ratio increases, it suggests investors are rotating funds into ethereum and altcoin markets and vice-versa. It said since the end of October, the ratio has recorded a steady upward trend and recently topped its highest level since 2018.
Crypto enthusiasts are not hesitant to point out that the current volatility and economic uncertainty have been driven by the omicron – new COVID variant. There is also the ongoing push by US lawmakers on crypto regulation as well as the infrastructure bill which was signed by President Joe Biden. Notedly, this bill contains provisions for crypto tax.
And last week, the top executives of crypto firms – Coinbase, Stellar, Circle, and FTX testified before the US congressional hearing for the first time ever. According to Time, the US House Committee on Financial Services has had a clear and growing focus on cryptocurrency and its risks to American investors and consumers.
Meanwhile, US stocks have also been tumbling. The S&P 500 fell 0.9%, the Dow Jones Industrial Average also fell 0.9% and the tech-heavy Nasdaq gave up 1.4% Technology, energy and travel-related companies had some of the biggest losses. Nvidia, General Motors, and Devon Energy were among the biggest decliners in the S&P 500.