The Bitcoin shed a fifth of its value on Saturday, and some analysts called the market crash “profit-booking” time, as the cryptocurrency market hit its recent high. Justin d’Anethan, Hong Kong-based head of exchange sales at cryptocurrency exchange EQONEX , told Reuters that he had been watching the increase in leverage ratios across the cryptocurrency markets as well as how large holders have moved their coins from wallets to exchanges. The latter is usually a sign of intent to sell.
According to BitInofCharts, the trader’s initial value was estimated at $16.29billion just a day before with an additional loss of $2.48billion in one day, ultimately wiping out all of the trader’s profits. The selloff also comes ahead of testimony by executives from eight major cryptocurrency firms, including Coinbase Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried, before the US House Financial Services Committee on December 8.
The hearing marks the first time major players in the crypto markets will testify before US lawmakers, as policymakers grapple with the implications of cryptocurrencies and how to best regulate them. Meanwhile, India is yet to table the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for introduction in Parliament’s Winter Session, which seeks to prohibit all “private cryptocurrencies” in. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.
The market crash was attributed to several factors, including the US job growth slowdown in November and the Omicron variant of the coronavirus keeping investors on edge. India’s reluctance to legalize cryptocurrencies also played a role in the crash, as some analysts believe that it would be better regulated if it did so.
Bitcoin is digital money used for secure and instant transfer of value anywhere in the world. It is not controlled or issued by any government or central authority. Bitcoin is created through a process called “mining,” which involves solving complex mathematical problems using computers. Bitcoin can be used to pay for goods and services, or held as an investment.
Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services.