A dreadful age, the crypto winter, a time of reduced volatility and insane liquidations. Yes, another plunge strikes and the numbers are disturbing at best. With all that, the US regulators are now playing the big bear part by going on full crackdown mode on cryptocurrencies. Primarily, the argument is that pretty much all crypto assets are securities. By doing so, the regulatory attitude toward these assets would be much more restrictive. Now, despite Elon’s tweets, law enforcement agencies and financial regulators are squeezing the market. As predicted, crypto regulations are in full swing and the market’s reaction has been short of confident.
In the meantime, the Silicon Valley Bank had full breakdown and failed. Consequently, the crisis escalated to a whole another level. The Circle issued USD Coin depegged from the US dollar and fell down to $0.89 from $1. Worse yet, Ethereum gas fees have now gone through the roof. At the moment, USDC is down 11% and is trading at $0.88. which is terrifying for the market. Simultaneously DAI, and algorithmic stablecoin is also down 10% and is trading at $0.9. For the time being, Tether is holding on pretty well. Ironically, Coinbase had previously warned about Tether and had called USDC a much more reliable option. How the turntables!
As the latest wave of crypto winter, almost half a billion dollars of crypto was liquidated in 24 hours. This came after a powerful law enforcement agency targeted Ethereum with a lawsuit. And when it comes to lawsuits, they can be devastating for crypto assets as we saw with the Ripple lawsuit. Nonetheless, the Silvergate Bank may have pushed BTC down below $23k, but this time an Ethereum vibe-check has created another bearish wave.
Crypto Winter Continues
Yesterday, over $429,000,000 worth of Bitcoin and crypto assets were liquidated in less than a day. Following a series of bad news, the market had a negative reaction which followed by a plummet across the board.
New data from Coinglass shows 137,969 traders lost their bet on crypto assets on March 10th. Specifically, Bitcoin and Ethereum took the crown in lost investments with $141 million and $110 million in liquidations respectively.
Both BTC and Ether are down 6% at the time of writing this article. BTC is currently trading at $20,366 and Ethereum is at $1,406. In terms of price action, both assets have not had a significant recovery but remain stable.
Subsequently, other crypto assets including Solana, Litecoin, DOGE and Polygon (MATIC) followed the same path in the yellow wood.
Sliding into an Ice Age?
Primarily, three things caused this derailment. One, the Biden administration stated that they would impose a 30% tax on crypto miners. Two, the New York’s Attorney General filed a lawsuit on Ethereum calling it a security. And three, the Silicon Valley Bank’s failure.
Now, the depegging of USDC and Dai can also jump start a bandwagon effect but we should wait and see how fast they recover. However, USDC’s reputation will likely take a big hit even if they manage to perform a miraculous recovery. After all, shouldn’t stablecoins be stable?
As for Ethereum, the lawsuit is a serious deal and the increased gas fees mean that investors cannot cash out their shitcoins soon enough. So, Ethereum will likely slide into a long-term bear trap even if they fix this mess.
Now, unless Elon can be very funny on Twitter and post a whole lot of dog pictures, this crypto winter is probably just beginning. With the onslaught of regulations and the recurring collapse of fraudulent centralized entities run by Adderall-popping tech demons, investors should proceed with extreme caution.
But honestly, why is my Twitter timeline overwhelmed by Elon’s memes?