Coinspeaker
Crypto Stocks Take Hit as Bitcoin Retraces to $28K
Crypto stocks fell amid a recorded retracement of the leading digital currency, Bitcoin (
BTC). The largest crypto by market cap is changing hands around the $28K threshold after hitting $31K less than a week ago. Alternatively speaking, BTC has traded down by more than 3.4% in the last 48 hours. Furthermore, in the previous 24 hours, the market capitalization of all digital currencies also dropped by a similar margin to $1.28 trillion.
Elsewhere, crypto stocks such as Marathon Digital (NASDAQ: MARA) and Riot Platforms (NASDAQ: RIOT) led losses amid the Bitcoin descent. Both crypto mining companies traded at a 10% drawdown as of yesterday evening, with Hut 8 Mining (TSE: HUT) also trading down 9%. In addition, shares of crypto exchange
Coinbase (NASDAQ: COIN) and Bitcoin-loving business intelligence firm
MicroStrategy (NASDAQ: MSTR) declined by more than 6%.
Crypto Stocks, Bitcoin Pull Back as Other Western Macroeconomic Concerns Weigh Heavy
Although there was no specific reported reason for Bitcoin’s pullback, the UK’s consumer price report two days ago gave investors cause for concern. Early Wednesday, the CPR revealed that inflation stayed strong above 10% in March, suggesting that Western central banks might not reverse rate hikes. The UK CPR report was not well received among traders and investors who previously believed inflationary pressure was abating.
Across the Atlantic in the US, economic data released early yesterday revealed some macroeconomic underperformance. For example, US initial jobs claims swelled from 5,000 to 245,000 compared to the 240,000 analysts expected. Furthermore, April’s Philadelphia Fed Manufacturing Index (FMI) slumped to -31.30 versus the consensus estimate of -19.2. This month’s Philadelphia FMI also paled compared to March’s steep read of -23.2. Lastly, US existing home sales for March slipped 2.4% against forecasts for a 5% rise.
The US Federal Reserve’s Federal Open Market Committee (FOMC) will hold its next fiscal meeting in two weeks. As the due date approaches, the consensus agreement is that the FOMC would likely raise interest rates again. However, speculations abound over the magnitude of such rate hikes, with short-term traders pricing in a 100% possibility of another 25-basis point increase. A week ago, traders priced in a 70% chance that the FOMC would resort to another rate hike.
Crypto Price Development Trails Binance-CFTC Issue
Bitcoin’s current decline comes in light of a crypto regulatory crackdown, with
Binance as the
latest target. Last month, the prominent exchange
came under investigation by the Commodity Futures Trading Commission (
CFTC) for trading derivatives products on its platform. However, in late March, Binance CEO
Changpeng Zhao responded,
rebuffing the CFTC’s allegations. Referring to the accusations as “unexpected and disappointing,” among other things, Zhao also said at the time:
“Binance has developed best-in-class technology to ensure compliance. Binance.com is the first global (non-US) exchange to implement a mandatory KYC program, and remains today to have one of the highest standards in KYC and AML.”
On trade manipulation allegations and duplicity, he also added:
“Binance does not trade for profit or “manipulate” the market under any circumstances. Binance “trades” in a number of situations.”
Zhang also addressed other issues, including how Binance enforces its compliance program using mobile carriers and device fingerprints.
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Crypto Stocks Take Hit as Bitcoin Retraces to $28K
