When it comes to the world of cryptocurrency, there is never a lack of news. In just the past week, we’ve seen Bitcoin dip back under $30,000. Analysts are calling this another sign of a bubble bursting and fear that this isn’t the only dip we’ll see in 2022. Critics continue to point at regulatory challenges as a main factor holding the market back. And now with China’s recent announcement that they will be restricting mining operations within their borders in an effort to protect their economy, there are fears that China might go so far as to ban or restrict mining activities outside of their country.
Despite concerns about China’s growth, bitcoin dips back below $30,000The cryptocurrency market declined on Monday after a positive weekend, mainly due to weak Chinese economic data.
Key Takeaways
After a positive weekend for cryptocurrency markets, Bitcoin/USD is back under $30,000. There were concerns over the weekend that the global economy was slowing as a result of weak Chinese data.
The US Retail Sales data and the Fed Chair’s speech will be this week’s key events for crypto markets.
State Of The Market
Cryptocurrency markets have been weak this week after a weekend of stabilization. Cryptocurrency market capitalization rose to nearly $1.344 trillion on Sunday, up nearly 25% from last Thursday’s multi-month low of $1.1 trillion, according to CoinMarketCap.
Despite closing out Sunday in the green for the third consecutive session, cryptocurrencies’ market capitalization fell slightly more than 5.0% to around $1.26 trillion on Monday.
In April, both China’s Industrial Output and Retail Sales experienced steep declines in YoY growth, according to data released over the weekend. Several major Chinese cities, including Shanghai and Beijing, have implemented harsh lockdowns in response to the outbreak of Covid-19.
The latest data from China, the world’s second-largest economy, illustrate investors’ growing concerns about global economic slowdown. Recently, these concerns have weighed heavily on risk-sensitive assets, like equities and crypto, along with fears about central bank tightening.US Retail Sales data will be released this week, and remarks by Federal Reserve Chairman Jerome Powell will be released. Growth fears and tightening fears will be in focus this week.
Markets expect the Fed to increase rates by 50 basis points at its next couple of meetings, as it seeks to bring rates to a more neutral level amid persistently high US inflation. There is a possibility that cryptocurrency rallies will continue to be sold owing to concerns about growth and tighter monetary policy.
Bitcoin, Ethereum, Altcoins
Over the course of the day, bitcoin fell from $31,400 on Sunday to just under $30, down nearly 5%. Currently, Bitcoin has a market capitalization of $570 billion and a crypto market share of 44.5%, making it worth about $29,000 per token.
Ethereum reached a high of $2,100 over the weekend and is trading near $2,000 now. At present, cryptocurrency has a market capitalization of about $245 billion, and the market share of the cryptocurrency is approximately 19.3%.The price of bitcoin and Еthereum has remained similar to that of most of the other non-stable coins in the top ten since the beginning of the month.
On Monday, Binance’s BNB declined roughly 5% and was trading below $300 per token, while Ripple’s XRP dropped about 6.0% and was trading around $0.40 per token. Cardano’s ADA decreased 4.5% to around $0.57 per token, while Solana’s SOL declined just shy of 8.0% to around $54. The price of DOGE has dropped 6.0% in the last 24 hours to just under $0.09 per token.
DeFi, NFTs
In the last week, the market of major DeFi tokens has collapsed from near $100 billion to lows around $50 billion after LUNA led a rout last week. There has been little change in the market cap of DeFi tokens since Sunday, which is about $56 billion.The market cap of Terra’s native token, LUNA, rose over the weekend to $3.0 billion, but has since dropped back down to around $1.4 billion.UST smallholders had been told something stupid by an influencer about “20% interest rates on US dollars”, SFYL, and personal responsibility and Vitalik Buterin strongly supports a plan that would provide “coordinated support and relief.”
Meanwhile, the fate of $1.2 billion in Luna Foundation Guard (LFG) bitcoin reserves remains unknown. The LFG is a non-profit that supports the Terra ecosystem by building up large bitcoin reserves to support UST. In a separate incident, a non-fungible token (NFT) belonging to Bored Ape Yacht Club was mistakenly sold for $200 over the weekend. It has been speculated that the sale may have been the result of tax evasion/avoidance.
Exchange Flows
In the last week, bitcoin was worth $19.4 billion when compared to $17.9 billion when it was exported from cryptocurrency exchange wallets, according to Glassnode data. Considering last week’s volatile/bearish conditions, the net inflow to exchanges was about $1.5 billion in bitcoin. During times of cryptocurrency market stress, it’s not uncommon for investors to move their crypto to exchange wallets.
Last week, exchange wallets received $979.9 million in Еthereum and $3.8 billion in USDT (Tether USD). Exchange flows on Sunday included a net outflow of just under $70 million for bitcoin, a net inflow of just under $50 million for Еthereum, and a net inflow of just over $70 million for USDT.
Crypto Adoption
Two major global investment banks showed their confidence in crypto by funding Elwood Technologies, a crypto trading and portfolio management software company, for $70 million. SIB Holdings will buy a 51% stake in BITpoint Japan’s crypto trading platform BITpoint Japan. Greyscale Investments is launching its first exchange-traded fund in Europe with this offering.
Through the Future of Finance UCITS ETF, investors can gain exposure to companies such as PayPal, Coinbase Global, Block, Robinhood Markets, and Argo Blockchain, which will list on the London Stock Exchange, German Börse, and Italian Borsa Italiana. The CEO of FTX, Sam Bankman-Fried, said that bitcoin will not be a payment system in the future, but a store of value.
Regulatory Landscape
As a result of the collapse of LUNA and UST, stablecoins will be regulated by the UK government. Reports say that as long as stablecoins aren’t algorithmic (like UST was), they don’t mind them. South Korea might launch a review of cryptocurrencies as a result of the LUNA and UST crashes.
El Salvador’s President Nayib Bukele tweeted on Monday that “32 central banks and 12 financial authorities (44 countries) will meet in El Salvador on Tuesday to discuss financial inclusion, digital economy, banking the unbanked, and the #Bitcoin rollout and its benefits.” The meeting takes place on Tuesday. In a statement, the Reserve Bank of India warned Indian lawmakers that the adoption of crypto currencies could lead to the “dollarization” of the economy, and reiterated their recommendation for a complete ban. Indian crypto celebrities are also likely to be banned in the near future.
A new rulebook published over the weekend by the Securities and Exchange Commission of Nigeria states that all digital assets represent either debt or equity claims against the issuer and therefore fall under their purview.
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Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
