Crypto market update: BTC slumps after two days of gains
After gains prompted by record US inflation, cryptocurrencies have retraced today
The prices of all the major cryptocurrencies had slumped by midday on Friday 14 January, wiping away almost two days of gains.
As crypto holders in the US approach the tax season, they are due to pay 90% of their taxes on digital assets over the next few days, which may make real estate-related investments a more attractive proposition.
“Taxpayers who partook in the 2021 crypto bull market may need to pay hefty tax bills in the coming days, resolve some tax uncertainty on select transaction types, and/or take advantage of some remaining 2022 strategies that can reduce their 2021 tax bills,” explained Chainanalysis researchers.
Oil price rising
On the other hand, the US inflation rate – which is currently at its highest level for the past 40 years, prompting a hawkish Fed stance – brought the Treasury Note yield back up to 2021’s highest levels (1.74%) and has led to widespread selling across traditional European stock markets, except on the FTSE 100 (driven by positive data on UK growth in November).
As demand outstrips supply, the price of Brent was 0.7% higher at $85.06 per barrel, with US WTI higher by 0.5% at $82.50. Gold was $1,821.33 per ounce, around 0.1% lower in the last 24 hours.
Meanwhile, the major cryptocurrencies were all bleeding at midday, with crypto investors worried, again, over global logistics issues affecting miner shipment schedules.
The two leading miners, Marathon Digital Holding and Riot Blockchain, announced that their new Antminer computer fleets will not be operational until Q4 2022 or early 2023. Both mining firms were trading lower in the last US trading session.
According to Currency.com, BTC, the largest cryptocurrency by market capitalisation, is trading 3.7% lower over the past 24 hours at $42,259.19 – and 0.1% higher over the past seven days.
The market cap of BTC was around $800.62bn, representing around 40% of the overall crypto market capitalisation, while the leading crypto’s trading volume has been around 55% lower at $35.9bn in the past 24 hours.
The total crypto market capitalisation decreased by $64bn, from $2.080trn to $2.016trn, in the past 24 hours.
Ether and stablecoins
In line with other major cryptos, ether (ETH) was trading 3.8% lower at $3,229.77, with a market capitalisation of $384.8bn. The cryptocurrency’s trading volume was around 6.0% higher at $15.9bn in the past 24 hours.
Meanwhile, in line with major stablecoins, binance coin (BNB), the third-largest cryptocurrency by market cap, was trading 1.2% lower at $475.70, with a market cap of $79.3bn and a trading volume of $4bn – almost 1.2% higher in the past 24 hours.
Solana, which recently started powering NFTs and the metaverse, was trading 6.3% lower at $144.63, with a market cap of $45.3bn and a trading volume of $2.4bn. Finally, cardano (ADA) was trading 3.1% lower at $1.24.
Top gainers and losers
Bitecoin (BITC) and several other minor cryptos witnessed an increase of more than 1,000% in the past 24 hours.
On the flipside, ethereum meta (ETHM) was trading down by over 100%.
All prices correct as of 13:30 GMT.