Bitcoin Drops Amid Bank Contagion Fear
By Laxmikant Khanvilkar
Virtual digital assets or VDAs are struggling to break out of the trading range established over the past few weeks. The U.S. banking crisis are certainly become real but Crypto’s are not witnessing same amount of inflows as was witnessed during the banking drama with SVB, analysts said.
Apparently, leading virtual currencies such as Bitcoin, Ether are limping.
After spending much of Thursday’s session quietly hovering near $29,000 level, roughly where it’s stood for much of the past 10 days, Bitcoin, the largest cryptocurrency by market capitalization was recently trading at around $28,900, down 0.4%. Ether (ETH), the second-largest cryptocurrency by market capitalization, followed a similar pattern and was changing hands around $1,880, down 1.3%.
Investors are weighing options after the U.S. and European central bank interest rate increases and the latest debacles in a mushrooming bank crisis.
The global crypto market cap eased 0.84% to $1.19 tn, over the last 24-hours.
The total crypto market volume has declined 22.91% to $32.50 bn. The total volume in DeFi is currently $2.22 bn, 6.84% and that if all stablecoins at $29.16 bn, which is 89.71% of the total crypto market 24-hour volume. Bitcoin’s dominance is currently 47.12%, an increase of 0.07% over the day.
IC 15, which measures performance of top 15 coins, was down 0.35% to 39,134. Traditional markets are once again feeling the hit from financial crisis. The S&P 500, Wall Street’s benchmark equity index, lost 0.7% Thursday. The Dow Jones Industrial Average (DJIA) and the tech-heavy Nasdaq Composite slid 0.8% and 0.4%, respectively.
Stocks of several U.S. regional banks tanked, including those of Los Angeles-based PacWest Bancorp (PACW) dropping 50% Thursday afternoon and Phoenix-based Western Alliance Bancorporation (WAL) falling 38%. Investors fretted over bank sector contagion, which began in mid-March with the collapse of three banks, including Silicon Valley (SVB) and Signature.
In bond markets, the note on the two-year Treasury yield – a gauge of near-term interest rate expectations – fell 15 basis points to 3.78%, close to its lowest mark this year. The 10-year Treasury yield also slid roughly 2 basis points to sit around 3.37%.
With financial sector getting increasingly ugly, the trouble for the broader economy is likely to spread. As such, the “Bitcoin appears anchored until it gets regulatory clarity”, Edward Moya, senior market analyst for foreign exchange Oanda, wrote in a Thursday note.
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