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Featured SpeakerAlex ThornHead of Firmwide ResearchGalaxyHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your Seatshare on Facebookshare on LinkedInshare on TwitterFeatured SpeakerAlex ThornHead of Firmwide ResearchGalaxyHear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.Secure Your Seat
Bitcoin (BTC) was hovering near $29,300 on Wednesday, down 3% over the past 24 hours, hours after a massive sell order on Binance and U.K. hot inflation data sent the price tumbling.
The largest cryptocurrency by market cap recently fell below $30,000 a day after regaining its perch above this psychologically important threshold and dipped as low as $29,045 at one point, according to CoinDesk data.
Bitcoin price chart showed a price drop on Wednesday. (CoinDesk)
The decline also caught traders who were betting on an increase off guard because the majority of BTC liquidated positions were long, according to data from futures and trading platform Coinglass.
Ether (ETH) followed a similar pattern, dropping below $2,000 on Wednesday for the first time in almost a week. The second-largest cryptocurrency by market value was recently changing hands around $1,981, down over 4% from Tuesday, same time.
Most major cryptos were in the red on Wednesday, including a number of decentralized finance tokens. DeFi exchange Uniswap’s UNI and lending platform Aave’s AAVE sank 6% and 7%, respectively, to trade at around $5.90 and $74.85. Maker’s MKR tanked by 5% to hover at around $729.31.
The CoinDesk Market Index (CMI), which measures overall crypto market performance, was down 3% for the day.
Decentralized exchanges (DEX) volumes had been surging amid growing concerns about their centralized counterparts, Joshua Frank, co-founder and CEO of digital asset information platform The Tie, wrote in an email to CoinDesk.
“I think it’s likely that we see this trend continue until we get clarity on the Binance regulatory situation,” Frank wrote, although he added that DeFi accounts for less than 5% of the overall crypto market cap.
Meanwhile, increasing regulatory scrutiny continued with the Securities and Exchange Commission (SEC) reopening a proposal from last year that would target DeFi exchanges for regulation.
“Regulatory crackdowns against DeFi, concerns around security with DeFi hacks occurring regularly, and nervousness around who the counterparties actually are on DeFi platforms are likely going to continue to delay real institutional adoption,” Frank said.
Equities were mixed during the afternoon as investors continued to process first-quarter earnings from big banks, including Morgan Stanley’s disappointing results. The S&P 500 was trading flat, while the tech-heavy Nasdaq was up 0.1%. The Dow Jones Industrial Average (DJIA) was down 0.3%.
The two-year Treasury yield – a gauge of near-term interest rate expectations – rose 6 basis points to 4.26%. The CME FedWatch, which measures traders’ expectations for U.S. central bank interest rate decisions, showed an 83% probability of a 25 basis points hike in May when the Federal Open Market Committee (FOMC) meets again.
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