Daily Management Review

Eight Of Top 10 Cryptocurrencies Continue To Fall, Analysts Cite Multiple Factors


Eight Of Top 10 Cryptocurrencies Continue To Fall, Analysts Cite Multiple Factors
The high volatility in the crypto market on Tuesday continued to impact the cart on Wednesday.
In Asia, except for stablecoins that are pegged against the dollar, the value of all other eight of the top 10 cryptocurrencies were down in trading on Wednesday.
There was a drop of about 6 per cent in the value of Solana and Binance Coin both while a 5 per cent fall was seen in Dogecoin and XRP.
There was also a decline of about 3 per cent since Tuesday in the global crypto market cap to $2.57 trillion. On the other hand, however, the total crypto market volume surged by about 24 per cent to $143.10 billion.
Earlier on Tuesday, there was a crash in cryptocurrencies across the board, with bitcoin, the largest of the cryptocurrencies, dropping below $60,000 for a brief period. 
All major cryptocurrencies were down and some were down by as much as 10 per cent compared to Monday.
This tanking was led by bitcoin dropped by 5.8 per cent in the past 24 hours till Tuesday following a peaking at about $69,000 last week. There was also an 8 per cent fall on Tuesday in ethereum with its value dropping by as much as 10 per cent during the day before picking up. 
According to analysts, a combination of factors is contributing to the current volatility in the crypto market, including the continued crackdown in China against crypto mining activity in the country.
An announcement of the continuation of a crackdown on mining of cryptocurrencies in China was made earlier on Tuesday by officials from the National Development and Reform Commission in a press conference. Crypto investors likely viewed this as a virtual rejection of the digital asset in the second-largest economy of the world. China also has among the largest number of cryptocurrency miners in the world. Spokesperson of the Chinese agency Meng Wei said that it would also crack down on any state company involved in crypto mining and will impose further pressure on regional authorities to crack down on any state involvement in crypto mining, according to Bloomberg.
On the other hand, despite reports last month of regulators in the United States seeking out ways and strategies for allowing banks to hold crypto assets, the US Securities and Exchange Commission, the financial regulator of the country recently did not approve of a proposal by VanEck’s for establishing its own bitcoin Exchange-Traded Future (ETF).
Additionally, there is also a continued strengthening of the dollar against fiat currencies, and especially against cryptocurrencies. One of the major reasons for the strengthening of the dollar is rising interest rates, a tactic used by central bankers to fight against inflation in various major markets of the world.
Some analysts also explain this fall in crypto assets as a part of a natural pullback in the digital cryptocurrency values in general, which have been on an upward curve more or less over the past few weeks.
It is however also being argued that cryptocurrencies, in general, is accustomed to weeks of volatility, which is often taken advantage of by some investors as a time for making investments. While the drop in crypto values can be detrimental for some crypto investors, those with a long-term viewpoint can be confident of the often volatile nature of cryptocurrencies in general.