Cryptos Drop Further Ahead Of Key House Committee Hearing

Cryptocurrencies retreated again after rebounding a day ago.

The whipsawing prices has pulled the crypto market capitalization to $2.3 trillion, versus $2.4 trillion on Tuesday morning. The 24-hour trading volume is $104 billion, as compared to $125 billion a day ago. Sentiment remains muted ahead of a Full Committee Hearing convened by the U.S. House Committee on Financial Services on Wednesday, as it could reflect the tone of future regulation of crypto by the U.S. government.

The hybrid hearing is entitled “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States.” Top executives from Circle, FTX, Bitfury Group, Paxos Trust Company, Stellar Development Foundation and Coinbase Inc. are expected to testify before the Committee. The discussions would mainly cover crypto exchanges, stablecoin offerings, regulatory concerns in digital assets and federal regulatory responses.

Bitcoin is trading at $49,102.05, losing 3.6 percent in a day and 15.2 percent in a week.

Ethereum is trading at $4,295.6, having lost 1.03 percent in the past 24 hours. Open Interest in the Micro Ether Futures launched by Chicago Mercantile Exchange increased to 771 on Tuesday, from the level of 662 on the opening day i.e., December 6th.

Market capitalization of Smart Contracts has contracted around 1.1 percent to $748 billion. Top-ranked Ethereum shed 1.03 percent, whereas ADA, AVAX and ALGO declined between 4 and 5 percent.

In regulatory news, Australia is reportedly planning to create a licensing framework for cryptocurrency exchanges.

Meanwhile Iceland authorities are reported to have decided that no new requests for power from Bitcoin mining operations would be accepted.

Payments giant Visa has announced the setting up of a new cryptocurrency-focused advisory unit within the company’s broader consulting and analytics division to help clients get to grips with the cryptocurrency industry.

Following community backlash, NFT marketplace OpenSea has clarified that it is not planning an IPO. The company has however said it is looking for fresh funds. NFT market capitalization has fallen around 2.13 percent to $62 billion.

Meanwhile, Chainlink Labs has roped in former Google CEO Eric Schmidt as a Strategic Advisor. 21st ranked Chainlink (LINK) has rallied more than 10 percent overnight and is currently positioned as the 5th most valuable crypto asset in the DeFi category.

DeFi market cap has fallen by 1.5 percent to $159 billion. 2.5 percent decline in Terra (LUNA), and more than 3 percent drop each in Avalanche (AVAX) and Wrapped Bitcoin (WBTC) have exacerbated the decline.

Web3 crypto market cap has declined around a percent to $71 billion despite rallies in second-positioned Chainlink (LINK) and third-positioned Filecoin (FIL). Topper Polkadot (DOT) has declined more than 2 percent overnight.

The Research category has dropped by 5 percent to $60 billion as top-ranked Cardano (ADA) and Algorand (ALGO) have declined more than 4 percent.

The Memes category too has fallen by 2 percent to $44 billion. Dogecoin (DOGE) and SHIBA INU (SHIB) which together account for bulk of the meme category market cap have both declined more than a percent from the previous day’s levels.

The Metaverse market capitalization has decreased around 3.8 percent to $40 billion. Decentraland (MANA) with a market cap of $6.65 billion and Axie Infinity (AXS) with a market cap of $6.59 billion occupy top slots in the category.

Notwithstanding the smart recovery from the wild weekend crash, crypto space continues to be plagued by lingering concerns about regulation, monetary policy tightening as well as the overarching influence of the derivatives market. The turbulence that has ensued is both an opportunity and a threat.

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