Cryptos Tank As Macros Hurt; Bitcoin Drops Below $39k

Cryptocurrencies plunged again early on Monday amidst an uneasy tryst with the macro-economic conditions, as red-hot inflation and surging bond yields stoked worries of a global recession. Bitcoin dropped below the psychological $39k level, touching $38,696.19, a level last touched in the middle of March 2022.

Cryptocurrency market capitalization is at $1.83 trillion, versus $1.89 trillion a week ago. Another major hack reported from the DeFi space, the proposal by Russian banks to criminalize un-hosted wallets in Russia, Dollar’s surge, the deferred Ethereum Merge, as well as fears of an expansion in Russia’s military aggression on Ukraine added to the negative sentiment.

DeFi protocol Beanstalk Farms suffered a $180 million hack as malicious actors exploited the Ethereum-based stablecoin protocol’s governance system to extract all of its collateral. This, combined with the flash loans route and the Tornado Cash tool, helped the hacker gain around $80 million from the exploit.

Reports indicate that the Association of Banks of Russia has called on lawmakers to criminalize storing of crypto on un-hosted wallets outside centralized exchanges.
The Dollar Index continued to rise, touching a fresh 52-week high of 100.76.

Bitcoin is currently trading at $39,340.41, down 2.55 percent on an overnight basis and 4.38 percent on a weekly basis. Market dominance of the lead cryptocurrency edged up to 41 percent from 40.8 percent, 5 days ago.

Ethereum is trading at $2,926.06, having shed 4.59 percent in the past 24 hours and 4.00 percent in the past 7 days. The correction comes amidst comments from Tim Beiko, one of the main developers of Ethereum, that the “The Merge”, to transition Ethereum from Proof-of-Work to Proof-of-Stake consensus would be delayed beyond the originally announced deadline of June 2022.

All of the top ranked cryptocurrencies are in deep negative territory except 9th ranked Terra (LUNA) which is trading 3 percent higher.

At the same time, TerraUSD (UST) the decentralized and algorithmic stablecoin of the Terra blockchain has become the third most valuable stablecoin, relegating Binance USD (BUSD) to the fourth spot.

In the category-wise market capitalization dominance, Smart Contracts aggregate to 28.72 percent; Stablecoins dominate 10.19 percent; DeFi commands 7.82 percent; Centralized Exchanges add up to 5.23 percent; Web 3 sums up to 2.70 percent; NFTs account for 2.17 percent; Research grosses 2.13 percent; Memes command 1.77 percent; Metaverse commands 1.49 percent; Decentralized Exchanges amount to 1.40 percent; while Gaming follows with 1.38 percent market capitalization.

Investors are debating whether the recent reduction in risk appetite in the crypto market is attributed entirely to the hyper-inflation narrative. The dread of a tight monetary policy that would increase the opportunity cost of holding non-interest-bearing cryptocurrencies appears to be the dominant concern for crypto investors and crypto watchers.

Source: Read Full Article