thecryptobasic.com
The start of 2022 was not good for the crypto market. Unlike for the last three years, this year started badly for Bitcoin and the company.
The global cryptocurrency market capitalization fell more than 5% today, dropping below the $2 trillion mark to $1.88 trillion, according to coinmarketcap.
Bitcoin continued its downtrend falling over 7% to $38,750. Bitcoin has lost over 14% since the beginning of this year, currently trading at $38,854
On the other hand, Ethereum has fallen below the $3,000 mark. It fell over 8% to $2,835. Cardano has fallen over 11%, while XRP, Polkadot, Litecoin Solana, Terra, Stellar have also been trading down in the 5-15% range over the past 24 hours. The price of Dogecoin also fell over 9% to $0.1487, Shiba Inu fell about 8% to $0.00002589 and, BNB dropped to $411, down 11%.
Reasons Of Market Fall
Cryptocurrency decline follows Wall Street losses on Thursday. The Nasdaq is down almost 5% this week, and the S&P 500 has fallen for the third week in a row.
As US 10-year Treasury yields soared earlier this week, rising rates forced investors to abandon their positions in riskier assets. Yields move in the opposite direction to prices. The Federal Reserve also said it plans to cut its balance sheet winding down bonds, and raise interest rates.
U.S Fed Tapering is bad for unregulated markets like crypto. Tapering is the process in which the Fed slows down its purchases of new assets, including securities and bonds. Fed tapering and increasing interest rates could cause global liquidity to shrink and ultimately affect bitcoin’s price.
The crypto industry has faced several regulatory setbacks recently as skepticism about the rapid growth of digital assets spreads around the world.
Cryptocurrency exchanges will be the focus of the US Securities and Exchange Commission regarding digital assets in 2022. Russia’s central bank may also propose a ban on bitcoin mining and cryptocurrency trading.
Crypto funds have seen outflows for the fifth straight week, digital asset manager CoinShares said in a report, net outflows of digital asset investment products for the week ended Jan. 14 totaled $73 million.
Huobi’s recent report also predicts that Bitcoin will enter a bear market this year.