Bitcoin Plunges Below $40K and Takes Entire Crypto Sector Downhill January 21, 2022 January 21, 2022 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsJanuary 21, 2022 by Kelly Cromley

Bitcoin Plunges Below $40K and Takes Entire Crypto Sector Downhill

On Thursday evening, bitcoin prices plummeted, while ether, the smart contract supporting blockchain, prices also plummeted. Bitcoin fell over 7% in the previous 24 hours to $38,536, as per Coingecko statistics.

Ether, the numero uno altcoin by market capitalization, has lost 8% of its value in the previous 24 hours. While writing this article, Ether was trading at $2,862, a slight improvement from the low of$2,809 recorded in the past 24 hours. Cryptocurrency declines mirror Thursday’s Wall Street woes.

The Nasdaq fell over 5% in the last five trading sessions, and the S&P 500 is in its third consecutive week of declines. As the 10-year US Treasury’s yield increased earlier this week, investors sold their holdings in riskier assets. Yields move in the opposite direction of prices.

Additionally, the Federal Reserve has suggested that it intends to begin shrinking its balance sheet, decreasing asset purchases, and rising interest rates. A popular investment thesis for bitcoin is that it acts as a hedge against growing inflation caused by government stimulus, but economists warn that an aggressively more hawkish Federal Reserve might deflate bitcoin’s sails.

However, when yields reversed later in the week, senior market analyst Edward Moya of foreign currency trading company Oanda said it was “a little disheartening” that bitcoin did not respond more favorably to the reversal in Treasury rates. Since November, bitcoin prices have declined by more than 40% from a peak of nearly $67,500 in 2021.

According to some analysts, the crypto industry might soon enter a bear market, as increased regulatory scrutiny and wild price swings have dimmed bitcoin’s prospects. Cryptocurrencies are also being targeted by regulators. China has outright banned any cryptocurrency-related activity, and the US government is likewise cracking down on key areas of the business.

Moya projected in a Thursday note that bitcoin might fall below $40,000 after Russia’s central bank’s proposal to restrict the utilization and mining of cryptocurrencies on Russian territory, stating the digital currency threatens “financial stability and monetary policy autonomy.”

Russia, he observed, is one of the top three nations for bitcoin mining.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.