IIt’s been a whole week in the sector that never sleeps. Cryptocurrencies slumped last Wednesday, rebounded, and then fell back towards the weekend as regulatory issues in China and the US weighed on the sector.
By the end of Tuesday, many digital currencies had regained some of the losses, but were still trading well below their levels before the sharp decline.
In a week largely negative for crypto news, a surge in trading as many investors appeared to be looking for a slump created a myriad of problems for the crypto exchanges. In the US, the chairman of the Senate Banking Committee, Sherrod Brown, has questioned the recent national trust deeds some crypto firms have received from the Office of the Currency Verifier (OCC), an independent regulatory bureau within the US Treasury Department.
With regard to the broader crypto topic of our ETF screener, blockchain gained 0.93% in the last week and is thus slightly behind the S&P 500 index, which is currently up 1.10% (as of: US market close on May 25).
Meme coins follow a major crypto crash
Ethereum [ETH] Last week’s free fall exceeded that of Bitcoin [BTC] 30% midweek drop as the second largest cryptocurrency by market cap fell 43.20% in 24 hours last Wednesday, falling from a daily high of $ 3,437.94 to a low of $ 1,952.46, based on data from Yahoo Finance. According to Coindesk, this was the biggest crypto sell-off since “Black Thursday” in March 2020. ETH partially recovered, fell back and started the week on the front foot. By Monday evening (BST) it rose 32.83% to $ 2,447.71 in 24 hours. By early Tuesday evening (BST), the Ethereum had risen a little higher to USD 2,568.01, according to Coindesk.
Popular memes Crypto, Dogecoin [DOGE]followed the wider market sell-off and fell as much as 54.19% on Wednesday last week (from an opening price of $ 0.476 to a low of $ 0.218). Dogecoin continued to rebound to $ 0.333 – a 30.04% decrease, according to Yahoo Finance. DOGE has been volatile in the days since then but was trading at $ 0.339 by early Tuesday night (BST), according to Coindesk.
“Without significant acceptance in the mainstream [and] Recognition … Alts are and always have been more speculative than Bitcoin … that means that they rise faster on bull runs and fall sharper on falls ”- Hunain Naseer
Senior Editor at OKEx Insights, Hunain Naseer, explained why memes and smaller altcoins in general are following the wider sell-off. “Without significant acceptance in the mainstream [and] Recognition … Alts are and always have been more speculative than Bitcoin … that means they rise faster on bull runs and fall sharper on falls. “
Total market capitalization for crypto declined 22% in the past week to $ 1.565 billion in the past week, according to TradingView. “The catalyst is a market that has been at great risk of retreat after a parabolic surge and that is being pressured a little more by global macro forces,” said Joel Kruger, currency strategist at LMAX Digital, as reported by Coindesk.
Exchanges are struggling to cope with high volumes of crypto
Last week’s extreme crypto volatility created widespread technical problems for large blockchain exchanges across the board, such as Coinbase [COIN]Twins [GMNI], Binance, and Kraken have all struggled to cope with increased levels of activity.
A Kraken note reads, “From today’s perspective, it appears that many investors are taking advantage of this morning’s hiatus to buy the dip, resulting in a significant increase in web traffic and trading activity across the industry,” reported CoinDesk.
“From today’s perspective, it seems that many investors are taking advantage of this morning’s hiatus to buy the dip, resulting in a significant increase in web traffic and trading activity across the industry” – Kraken statement
Coinbase said that problems on its website, mobile devices and APIs resulted in “intermittent downtime”. Kraken admitted “connectivity issues” on the web and mobile and a problem with the buy it now feature, while Gemini said its users may experience “degradation”. “”
The world’s largest exchange by volume, Binance, said withdrawals have been “temporarily disabled” due to network congestion. Voyager Digital crypto holding company [VYGR] The reasons cited for the app failure were “widespread exchange failures and exchange connectivity issues across the market”.
The chairman of the US Senate questions the charter of the crypto companies
Sherrod Brown, Senator from Ohio and chairman of the Senate Banking Committee, has raised concerns about the Office of the Currency Auditor (OCC) issuing national deeds, reports Coindesk. Brown believes that some companies that apply for charters with the U.S. regulatory agency are failing the OCC’s requirements. In an open letter, Brown named three crypto firms – Paxos, Protego, and Anchorage – that have received OCC conditional trusts in the past few months.
“Given the many uncertainties in the digital asset landscape … the volatility of digital asset valuations and the disproportionate impact that individuals can have on entire cryptocurrency markets, the OCC is unable to regulate these companies compared to traditional banks” – Michael Hsu
Brown has asked acting auditor Michael Hsu to reconsider these decisions. He said, “These companies suggest that the approval of their charters by the OCC guarantees that their business model is as secure, stable and reliable for customers as it is for a local community bank. The fact is, given the many uncertainties in the digital asset landscape … the volatility of digital asset valuations and the disproportionate impact that individuals can have on entire cryptocurrency markets, the OCC is unable to rank these companies as compared to traditional banks to regulate. “
The Senator questioned whether the OCC had performed “appropriate due diligence” prior to issuing the three conditional charters. Hsu, who has just stepped into the role, has stated that the OCC is reviewing how it handles cryptos
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