The cryptocurrency market is treading cautiously since the start of 2022 and has been trying to get a good grip. A strong US dollar and higher reinforced treasuries have made it hard for cryptocurrencies, especially bitcoin to climb higher.
At the time of writing this article, the world’s most popular crypto has been down by 0.86% in the last 24-hours and stands at just above $41,000. BTC has been down by 1.98% in the last seven days. The second popular cryptocurrency, Ether has also been sinking. It hasn’t reached its $4,000 mark in weeks.
The crypto price struggle reflects uneasiness about the US and global economies due to high inflation and the COVID-19 pandemic as it continues to create havoc. There are also fears that the Feds will raise interest rates more steeply than expected. Moreover, investors are feeling the heat and are exiting companies that are losing money.
Edward Moya, a senior market analyst at OANDA, says BTC will continue to trade as a risky asset. Bitcoin is susceptible to fears and uncertainty fueled by inexperienced investors. Moya believes whatever path the Feds would take, BTC price will rebound. He said the breakout in Treasury yields was unexpected. Once it ends, many traders will scale back to cryptocurrencies.
Stablecoins Also Feel The Shake-Up
Stablecoins are also feeling the uncertainty in the market with the dominant Tether falling to 45%. However, the token still remains the market leader with 78.4 billion tokens in circulation. USDT was comfortable having the larger share of the pie, a great big 75% in January 2021. However, its rival the USD Coin has recorded a massive boost in supply for the past 12 months. It now has 45.4 billion tokens circulating, a significant gain of 800% since January 2021. As such, Circle has achieved a stablecoin market share of 26%.
Binance USD is the third-largest stablecoin, with a circulation of 14.2 billion tokens, by market capitalization. And TerraUSD comes in fourth place.