3AC The infamous collapse of Terra sisters UST and Luna is the new casualty of the crypto market crash that wiped out investors’ wealth to zero. This has affected investor confidence in the digital currency market.
According to CoinMarketCap, the crypto market cap fell 4.29% on the previous day and was trading around $859.31 billion. Bitcoin dominance fell 0.19% during the day to 42.46%.
Bitcoin It is trading with a decline of 4.2% at $19,119.46. Its market cap was around $366.70 billion. The ethereum equivalent slipped about 6% and was near $1,040.
Bitcoin’s weekly drop was around 6%.
According to Coingecko, bitcoin is down about 15% in 14 days, while in one month the drop was about 39.5%. Bitcoin is down about 47% in one year.
From its all-time high of $68,789.63 on November 10, 2021, Bitcoin is down by over 72% so far.
Bitcoin is expected to reach $14,000. But the problem of bitcoin is so deep that one cannot even imagine.
On current market performance, a WazirX Trade Desk spokesperson said, “Bitcoin briefly fell below $20K yesterday, before recovering back. Largely unaffected. Market sentiment also remains deep in the “extreme fear” zone. On the hourly time frame, BTC trended forming a channel pattern forming a channel pattern between $20K and $22K Consolidated. Daily RSI is hovering around 25 levels, turning into oversold territory. The next major support is expected at $14,000.
Notably, the spokesperson noted that the Request Network (REQ), an Ethereum-based decentralized payment system, grew by more than 50% in the past 24 hours, outperforming bitcoin over the same period.
Last week, on June 23, Amanjot Malhotra, India-head of cryptocurrency exchange BitPay Global, took to his Twitter account to reveal 10 problems that bitcoin is facing right now. These are:
1. Bitcoin has no wash sale trading rules. Simply put, people can simply sell their bitcoin and buy it again and this is not the case with stocks, so once the loophole is closed – the price of bitcoin will become more stable.
2. Leveraged Trading. There are over 520 unregulated exchanges that offer 20x leverage and this means that the price of bitcoin is extremely sensitive to any movement, so once those exchanges are regulated and the leverage is reduced, the price of bitcoin can be reduced. The price will be more stable.
3. Number of cryptocurrencies in the market. There are over 19 000 crypto coins that are interconnected and cross-collateralized with bitcoin and not all of those projects are run by regulations. Thus, when some of the major cryptocurrencies collapse, it affects the price of bitcoin as well.
So far, there are some 20,069 cryptocurrencies and 513 exchanges, according to CoinMarketCap data.
4. CeFi/DeFi stability. These CeFi/DeFis that act as big banks can be volatile at times especially when they freeze withdrawals which heavily affects the price of bitcoin. Therefore, as they become larger and more mature and better regulated, the price of bitcoin will become more stable.
5. There is no official stablecoin yet. According to Amanjot, USDC and USDT are not real stablecoins in the sense that it does not give confidence to the market, especially after the Luna fiasco.
“Our parents don’t want to put their money in stablecoins because they don’t know whether it will lose 90% of its value overnight. So the upcoming CBDC from the government will really be of great help in maturing the space. ,” Amanjot said.
6. Bitcoin does not have a spot ETF, which means that according to a Bitfinex official, “our parents’ retirement money that is worth trillions of dollars is something the crypto space has not unlike traditional assets.”
7. Lack of insurance in cryptocurrencies. Crypto has no insurance protection like banks do with central banks because if you were a bank with a bank that collapsed you would be protected with up to a million dollars in cash and stock.
8. Governments all over the world are regulating and taxing crypto transactions. Government of India has just released its detailed plan regarding 1% TDS on crypto transactions.
“Almost all governments are doing something different in terms of taxation and accounting making it difficult for institutions/users to manage their books. Which discouraged them from investing further in bitcoin,” Amanjot said.
9. Still more clarification is needed from the regulators as to what securities are and how investors can invest in them safely.
10. Bitcoin is still not ESG compliant, but with every passing year – bitcoin becomes greener and more energy-efficient which becomes harder to criticize for being worthless.
“10 reasons that have nothing to do with the price of bitcoin that are going to change the game in the next 5-10 years, but these problems are not going to work on their own in the next few weeks or a few months, it will take some time.” That’s why it’s more important than ever,” said the Bite India chief.
He also added, “In bitcoin we have dollar cost averaging because the four year moving average on bitcoin is 21 685, so right now we are in a very rare but brief period where bitcoin is now trading at those levels.”