Cryptocurrency News: 5 News Caused Bear Market this Week
Cryptocurrency News: 5 News that Caused the Bear Market this week. Bitcoin and the rest of the altcoins sank, reversing the upward trend of 2023. The closure of two banks in the US, the inflation scenario and other events contributed to the fall. This week, Bitcoin reversed much of the gains accumulated during 2023. Putting behind the bullish rally of the last few months, Bitcoin (BTC) fell back to lows below $20,000. The top cryptocurrency fell below the $23,000 mark on Tuesday amid concerns about runaway economic inflation in the US and prospects for the Federal Reserve to continue its aggressive monetary policy.
Other discouraging news and developments continued to fuel the bearish streak in the crypto market, and by Friday, Bitcoin had hit as low as $19,628 , its lowest level since early January 2023. The cryptocurrency’s market capitalization plunged in parallel. , touching a weekly minimum of USD $379 billion.
The rest of the digital asset market slid as well, with Ether (ETH), the second largest digital currency by market capitalization, dipping below the $1,400 mark. ETH posted weekly losses of just over 10%, similar to Bitcoin , hitting lows not seen since the second week of January. the total cryptocurrency market capitalization slid below the $1 trillion mark, which had been lost for much of 2022 but had rebounded by late January. At the time of publication, the global market capitalization is around USD $930 billion. The notable price pullback coincided with the closure of two high-profile US banks, some major announcements by the US government, and several notable developments within the crypto industry. Below is a summary of the main news that negatively impacted prices this week:
FED anticipates more interest rate hikes
the first Cryptocurrency News that down the market is interest rates by FED. Concerns about inflation in the US continue to be a topic of interest among investors. Earlier this week, Federal Reserve (Fed) Chairman Jerome Powell suggested that interest rates could rise above expectations in the coming months, citing that recent economic data ” has been stronger than expected”.
Powell warned at an event on Capitol Hill that central bank officials are ” prepared to increase the pace of rate hikes.” Although during the second day of remarks he appeared to soften his tone , saying there is still no concrete decision on the next pace of hikes, the comments generally seemed to fuel investor fears that the Fed’s hawkish policy could extend further into the future. longer, negatively impacting the markets.
Silvergate Bank closes operations
Silvergate Bank , a California-based cryptocurrency-friendly bank, has shuttered operations and begun the voluntary liquidation of its business, it reported on Wednesday, March 8. The announcement came a few days after the company discontinued its SEN payment network, previously used by institutions to move money in and out of the cryptocurrency market. Silvergate had teased its complex financial situation the week before, when it delayed filing its annual financial report with the SEC and revealed it”. Several of its industry partners began cutting ties with the bank by then. Shares of the company sank more than 60% to record lows.
New York District Attorney Sues Exchange KuCoin
In a latest blow to the cryptocurrency industry, the New York Attorney General’s Office on Thursday filed legal charges against digital asset exchange KuCoin for offering and trading unregistered securities and commodities. The authority accused the platform of serving New York residents despite not being registered in that state, and labeled its Earn product (from lending and staking ) as an unregistered securities offering.
However, the highlight of the lawsuit was probably the fact that the Prosecutor’s Office classified Ethereum (ETH) as a security, challenging the previous classification of other national regulators. The move comes on the heels of other enforcement actions by US regulators against companies in the industry, including Kraken and Paxos .
Biden targets cryptocurrencies in his budget plan
US President Joe Biden presented his fiscal year 2023 budget plan mid-week, which aims to reduce the US deficit by nearly $3 trillion over the next decade. The proposal, which includes some notable tax reforms, including a tax increase for American billionaires, also has some provisions regarding how digital currencies are taxed.
One of these clauses proposes the implementation of a ” gradual 30% tax on the electricity used in cryptocurrency mining .” Meanwhile, another provision would seek to end a tax break that allows cryptocurrency investors to sell their assets at a loss and then buy them immediately afterwards.
Silicon Valley Bank is shut down by regulators
California regulators moved to close Silicon Valley Bank (SVB) on Friday, citing the bank’s “inadequate liquidity and insolvency.” The Federal Deposit Insurance Corporation (FDIC), which was appointed as receiver, seized control of the bank’s deposits in an attempt to protect investors.
The authorities’ notice came just hours after SVB, a major bank for venture capital-backed companies with a 40-year history, warned of its financial plight. In a letter, the entity reported a multi-billion dollar bond sale that would incur a loss of more than $1.5 billion, and was reportedly looking to sell off. Although not focused on digital assets like Silvergate , Silicon Valley Bank served notable industry clients such as Sequoia Capital.
More challenges for crypto in future
Other disheartening news, such as the shutdown of Blockchain .com ‘s asset management unit and an action by the US government to block Binance.US ‘s plans to take over Voyager , possibly also contributed to Bitcoin ‘s decline and slide. broader in the cryptocurrency market this week.
The closure of banks that served clients in the digital asset sector could potentially pose new challenges for companies in an industry, which have historically been shunned by traditional financial institutions. On the other hand, the uncertain economic outlook in the US and the aggressive actions of the FED continue to dampen the appetite for risky assets.
The lack of clear regulation in the North American country seems in turn to present itself as a strong bearish catalyst for the digital currency market this year, especially as US regulators move to scrutinize industry players, putting the stage even more uphill.
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Source: diariobitcoin.com
