Bitcoin (BTC) Price Tanks Under $27,000 amid Rising US Regulatory Pressures
Amid the US regulatory crackdown and the fall of the crypto-friendly banks recently, the lack of liquidity has become a major issue currently in the market.
The world’s largest cryptocurrency Bitcoin (BTC) continues to face more and more selling pressure as US regulatory crackdown mounts further. In the last 24 hours, the BTC price has dropped by over 2.98% and is currently trading at a price of $26,654 with a market cap of $516 billion.
The latest drop in the Bitcoin price comes along with a market-wide correction with the entire crypto market cap dropping to $1.1 trillion. Along with BTC, altcoins have also entered a correction of a similar magnitude.
The world’s second-largest crypto Ethereum (ETH) is down by 3.31% and is trading at $1,769 with a market cap of above $212 billion. Furthermore, altcoins like Polygon (MATIC), Polkadot (DOT), and others have also corrected by 3% and more, as of press time.
The US regulatory crackdown has recently forced more crypto firms to move out of the market. Earlier this week, two of the world’s top market-making firms – Jane Street Group and Jump Crypto – announced a pullback from the US market citing regulatory uncertainty and the difficulty of doing business.
Although both these firms announced an exit from the US market, they will continue their operations in the international market. However, as we know, the US is the biggest market when it comes to offering crypto liquidity. David Wells, CEO of Enclave Market told CNBC:
“In general, we’re going to see much larger swings in price both ways since so many large market makers have significantly reduced providing. Larger market makers create more stability in prices due to the liquidity they provide,” he added. “You’ll see more frequent gaps up and down since order books are thinner in general.”
US Regulatory Crackdown Intensifies
Following the collapse of the crypto exchange FTX in November 2022, the US regulatory crackdown has intensified. On the other hand, the regulators have also blamed the recent banking crisis in the US on the crypto market.
Earlier this year in February, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency issued a joint warning to banks over the risks associated with banking crypto firms.
The regulators have also been going after some of the top crypto exchanges including the giants like Coinbase and Binance. Earlier this week, crypto exchange Bittrex announced bankruptcy amid strong regulatory action by the SEC.
Following the closure of crypto-friendly banks like Silvergate Capital and Signature Bank, the illiquidity in the market has shot up significantly. After a strong rally to $30,000 last month, Bitcoin is facing selling pressure. It is still trading at more than 65% gains year-to-date.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
