$100 Billion Bitcoin And Crypto ETF Price Crash Suddenly Accelerates After Serious Fed Warning (2024)

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BitcoinBTC 0.0%and cryptocurrencies—including top ten coins ethereum, XRPXRP 0.0%and solana—have fallen sharply despite a huge $10 trillion bitcoin price bet. The bitcoin price has dropped almost 10% over the last 24 hours, weighing on the price of ethereum, XRP, solana and other top ten cryptocurrencies,wiping around $100 billion from the combined crypto market following its bitcoin spot exchange-traded fund (ETF) surge.

Ahead of the bitcoin price crash, legendary bitcoin and crypto trader Arthur Hayes had warned the Federal Reserve could be about to trigger a 30% bitcoin price crash—predicting “a vicious washout” in coming months.

“I am preparing for a vicious washout of all the crypto tourists in March of this year,” Hayes, the chief investment officer of family office Maelstrom and the former chief executive of the bitcoin derivatives pioneer exchange BitMex, wrote ina blog post…..Story continues….

By: Billy Bambrough

Source: $100 Billion Bitcoin And Crypto ETF Price Crash Suddenly Accelerates After Serious Fed Warning—Hitting Ethereum, XRP And Solana

Critics:

Themarket capitalizationof a cryptocurrency is calculated by multiplying the price by the number of coins in circulation. The total cryptocurrency market cap has historically been dominated by Bitcoin accounting for at least 50% of the market cap value where altcoins have increased and decreased in market cap value in relation to Bitcoin. Bitcoin’s value is largely determined by speculation among other technological limiting factors known as blockchain rewards coded into the architecture technology of Bitcoin itself.

The cryptocurrency market cap follows a trend known as the “halving”, which is when the block rewards received from Bitcoin are halved due to technological mandated limited factors instilled into Bitcoin which in turn limits the supply of Bitcoin. As the date reaches near of a halving (twice thus far historically) the cryptocurrency market cap increases, followed by a downtrend. By June 2021, cryptocurrency had begun to be offered by some wealth managers in the US for401(k)s.

Cryptocurrency prices are much more volatile than established financial assets such asstocks. For example, over one week in May 2022, Bitcoin lost 20% of its value and Ethereum lost 26%, whileSolanaandCardanolost 41% and 35% respectively. The falls were attributed to warnings about inflation. By comparison, in the same week, theNasdaqtech stock index fell 7.6 per cent and theFTSE 100was 3.6 per cent down.

In the longer term, of the10 leading cryptocurrenciesidentified by the total value of coins in circulation in January 2018, only four (Bitcoin, Ethereum, Cardano andRipple(XRP)) were still in that position in early 2022.^[112]The total value of all cryptocurrencies was $2 trillion at the end of 2021, but had halved nine months later.The Wall Street Journal has commented that the crypto sector has become “intertwined” with the rest of the capital markets and “sensitive to the same forces that drive tech stocks and other risk assets”, such as inflation forecasts.

There are alsocentralizeddatabases, outside of blockchains, that store crypto market data. Compared to the blockchain, databases perform fast as there is no verification process. Four of the most popular cryptocurrency market databases are CoinMarketCap, CoinGecko, BraveNewCoin, and Cryptocompare.

According to Alan Feuer ofThe New York Times,libertariansandanarcho-capitalistswere attracted to the philosophical idea behind Bitcoin. Early Bitcoin supporterRoger Versaid: “At first, almost everyone who got involved did so for philosophical reasons. We saw Bitcoin as a great idea, as a way to separate money from the state.”EconomistPaul Krugmanargues that cryptocurrencies like Bitcoin are “something of a cult” based in “paranoid fantasies” of government power.

David Golumbia says that the ideas influencing Bitcoin advocates emerge from right-wing extremist movements such as theLiberty Lobbyand theJohn Birch Societyand their anti-Central Bank rhetoric, or, more recently,Ron PaulandTea Party-style libertarianism. Steve Bannon, who owns a “good stake” in Bitcoin, sees cryptocurrency as a form of disruptive populism, taking control back from central authorities.

Bitcoin’s founder,Satoshi Nakamoto, has supported the idea that cryptocurrencies go well with libertarianism. “It’s very attractive to the libertarian viewpoint if we can explain it properly,” Nakamoto said in 2008. According to theEuropean Central Bank, the decentralization of money offered by Bitcoin has its theoretical roots in theAustrian school of economics, especially withFriedrich von Hayekin his bookDenationalisation of Money:

The Argument Refined,in which Hayek advocates a completefree marketin the production, distribution and management of money to end the monopoly ofcentral banks.

The rise in the popularity of cryptocurrencies and their adoption by financial institutions has led some governments to assess whether regulation is needed to protect users. TheFinancial Action Task Force(FATF) has defined cryptocurrency-related services as “virtual asset service providers” (VASPs) and recommended that they be regulated with the samemoney laundering(AML) andknow your customer(KYC) requirements as financial institutions.

In May 2020, the Joint Working Group on interVASP Messaging Standards published “IVMS 101”, a universal common language for communication of required originator and beneficiary information between VASPs. The FATF and financial regulators were informed as the data model was developed.

In June 2020, FATF updated its guidance to include the “Travel Rule” for cryptocurrencies, a measure which mandates that VASPs obtain, hold, and exchange information about the originators and beneficiaries of virtual asset transfers.Subsequent standardized protocol specifications recommended usingJSONfor relaying data between VASPs and identity services. As of December 2020, the IVMS 101 data model has yet to be finalized and ratified by the three global standard setting bodies that created it.

The European Commission published a digital finance strategy in September 2020. This included a draft regulation on Markets in Crypto-Assets (MiCA), which aimed to provide a comprehensive regulatory framework for digital assets in the EU. On 10 June 2021, theBasel Committee on Banking Supervisionproposed that banks that held cryptocurrency assets must set aside capital to cover all potential losses.

For instance, if a bank were to hold Bitcoin worth $2 billion, it would be required to set aside enough capital to cover the entire $2 billion. This is a more extreme standard than banks are usually held to when it comes to other assets. However, this is a proposal and not a regulation.

The IMF is seeking a coordinated, consistent and comprehensive approach to supervising cryptocurrencies.Tobias Adrian, the IMF’s financial counsellor and head of its monetary and capital markets department said in a January 2022 interview that “Agreeing global regulations is never quick. But if we start now, we can achieve the goal of maintaining financial stability while also enjoying the benefits which the underlying technological innovations bring.

Thelegal status of cryptocurrenciesvaries substantially from country to country and is still undefined or changing in many of them. At least one study has shown that broad generalizations about the use of Bitcoin in illicit finance are significantly overstated and that blockchain analysis is an effective crime fighting and intelligence gathering tool.

While some countries have explicitly allowed their use and trade,others have banned or restricted it. According to theLibrary of Congressin 2021, an “absolute ban” on trading or using cryptocurrencies applies in 9 countries: Algeria, Bangladesh, Bolivia, China, Egypt, Iraq, Morocco, Nepal, and the United Arab Emirates. An “implicit ban” applies in another 39 countries or regions, which include:

Bahrain, Benin, Burkina Faso, Burundi, Cameroon, Chad, Cote d’Ivoire, the Dominican Republic, Ecuador, Gabon, Georgia, Guyana, Indonesia, Iran, Jordan, Kazakhstan, Kuwait, Lebanon, Lesotho, Macau, Maldives, Mali, Moldova, Namibia, Niger, Nigeria, Oman, Pakistan, Palau, Republic of Congo, Saudi Arabia, Sengeal, Tajikistan, Tanzania, Togo, Turkey, Turkmenistan, Qatar and Vietnam.In the United States and Canada, state and provincial securities regulators, coordinated through theNorth American Securities Administrators Association, are investigating “Bitcoin scams” andICOsin 40 jurisdictions.

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