Bitcoin – and the crypto market as a whole – continued to fall, slipping overnight from Wednesday to Thursday to its lowest level since December 2020, even falling below the $27,000 mark at the start of the month. morning. The most famous digital currency was trading around 8am at $26,595.50 on the Bitstamp platform, which represents a drop of almost 15% in the last 24 hours. Its main rival, ether, had fallen back below the psychological threshold of $2,000.
Worries about rates on both sides of the Atlantic are clearly giving market participants cold sweats. We are witnessing a real wave of sellers who risk becoming “ruthless”, warns Timo Emden. According to the cryptocurrency expert, the current uncertainties are further exacerbated by the disappointment of terra, a “stablecoin” supposed to remain pegged to the dollar.
Read also: Bitcoin briefly falls below $30,000, the first since July 2021
Erosion of trust
Fear of a rapid rise in interest rates, particularly from the US Federal Reserve (Fed), is depriving bitcoin and others of one of the main breeding grounds of recent months. “Investors therefore continue to favor the defensive,” observes Timo Emden, referring to the risk of a downward spiral. Returning to the collapse of the terra (-94%), Ipek Ozkardeskaya highlights the failure of the third stablecoin in the world, which failed in its promise to maintain a stable value against the greenback. The Swissquote analyst finds that the erosion of trust has spread to the entire crypto market.
Read also: Stablecoins and bitcoins, intersecting destinies (for the worse)
In the face of the virtual currency debacle, US Treasury Secretary Janet Yellen is calling for increased regulation. But according to Ipek Ozkardeskaya, what the industry needs right now is a “return of confidence and excitement about how digital tokens fit into our increasingly digitized lives, rather than government regulation”.
Finally read: Global finance watchdog worries about crypto ‘threat’