Bitcoin punches its way out of a Sunday slump
Cryptocurrency titan, Bitcoin finally fights back after a troublesome Sunday session come Monday. The weekend had seen further signs of a Chinese crackdown on the crypto market.
Bitcoin had been seen last on a positive position at 8.8% to $37,766, which had done away with losses of 7.5% the day before. However, it is still down by more than 40% from the previous month.
It is determined that ETH, gunning second as the industry’s second-leading crypto, had jumped more than 17%, reaching as high as $2,459 post a slump of more than 8% on Sunday, dwindling into a two-month low territory. Regardless, it has fallen by almost half from a peak hit within the early segments of the month.
A number of policymakers have spoken regarding the popuarity and the volatility of cryptos. Federal Reserve Governor Lael Brainard on Monday gave a statement on a virtual conference organized by CoinDesk saying that the growth in private money, administering of digital payments and steps by other central banks were creating greater focus on Central Bank Digital Currencies (CBDC.). She furthers that the wide use of private money paves the way for risks on consumer and stability.
What had caused the Sunday plunge was that crypto miners halted operations in China with the progressing scrutiny from authorities.
Beijing is strong in its lobby against the cryptocurrency sector, thus shifting its attention to China that account for 70% of the asset’s supply.
With the pressure on, cryptocurrency exchange, Huobi had suspended both crypto-mining and a number of its trading services to new clients coming from the mainland, choosing to focus on businesses overseas. Other entities also followed suit and suspended business in China.
Market players are in agreement that in the short-term, things are likely to lead to pressure on prices with miners selling BTC that were held on their balance sheets.
James Quinn, Managing Partner at Q9 Capital, a Hong Kong-based crypto wealth managing firm was quoted saying,
“If they are pulling up stakes or shutting down, they may need to reduce their balance sheets in the short term,”
Meanwhile, Joseph Edwards, head of research at crypto brokerage Enigma Securities in an interview said,
“Nobody’s really sure about what happens next…Crypto clearly finds itself in a tough spot in terms of the narrative right now, and it’s taken a lot of oxygen out of the room.”