Crypto Crash Intensifies as Bitcoin Drops 10%
Bitcoin, the world’s largest digital currency, lost around 10% of its value on Friday after the panic among retail traders triggered a $100 billion sell-off in the crypto market. As of writing, BTC is trading near $45,500 with a total market cap of $850 billion.
The cryptocurrency market lost nearly $400 billion during the last 5 days. The total value of cryptocurrencies reached an all-time high of $1.75 trillion on Saturday after Bitcoin and Ethereum registered record highs. The crypto market reached a low of $1.37 trillion on Friday.
According to the latest data published by crypto analytics firm Bybt.com, around $900 million worth of long cryptocurrency positions got liquidated in the last 24 hours as Bitcoin and Ethereum lost nearly 10% of their values in a single day. Approximately 142,000 crypto traders were liquidated during the last 24 hours.
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Despite the positive news regarding the institutional adoption of Bitcoin and other digital currencies, the crypto market remained in a downtrend during the last 5 days. MicroStrategy, the world’s largest business intelligence firm, announced earlier this week that the company has purchased more than $1 billion worth of Bitcoin to increase its BTC holdings.
Market Correction?
Major institutional holders termed the recent downtrend as a healthy correction for the cryptocurrency market and an opportunity for new traders to enter the market but the high volatility and limited liquidity have raised concerns about the overall growth of digital assets. Bitcoin has now lost more than $200 billion of its market cap in the last few days. Bitcoin’s current market dominance stands at around 61.7%. Ethereum remained the worst-performing crypto-asset among the top 5 as ETH lost more than 25% of its value in the last 5 days. ETH crashed from a high of $2,020 to as low as $1,450 within this week. As of writing, the world’s second-largest crypto asset is hovering around $1,475 with a total market cap of $169 billion. Tether is the third-largest cryptocurrency with a market cap of $35 billion.
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UK Must Act Quickly to Ensure Fintech Lead, Encourage Crypto: Treasury Report Urges
The U.K. Treasury has released a report calling for a new regime for the regulation and administration of crypto assets.
An independent review initiated by U.K. Chancellor Rishi Sunak and led by Ron Kalifa shows the U.K. Treasury has set out a plan to retain what the report called the U.K.’s leadership position in fintech.
The report, titled the “Kalifa Review of U.K. Fintech” states the country has the potential to be the global center for the issuance, clearing, settlement, trading, and exchange of crypto and digital assets.
Kalifa highlights the European Union’s Markets in Crypto Assets (MiCA) proposal has been developing its propositions and the U.K. needs to “act quickly” to preserve and maintain its position as a hub for fintech firms.
“The U.K. should aim to be at least as broad in ambition as MiCA – but should also consider whether it can develop a bespoke regime that is more innovation-driven. A bespoke regime for crypto assets should adopt a functional and technology-neutral approach, in line with the principles of the current regulatory framework, as well as the concept of ‘same risk, same regulation’, while being tailored to the risks arising from crypto asset-related activities.” Kalifa Review of UK Fintech
There is the need to be “flexible” to deal with future challenges – such as how Decentralized Finance (DeFi) should be regulated, said the report.
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The review concludes the U.K. must continue participating in the international financial regulatory group, the Global Financial Innovation Network (GFIN), and lead the development of policy and regulation in the areas of crypto and digital assets.
Read more: UK Treasury Calls for Feedback on Approach to Cryptocurrency and Stablecoin Regulation
In January, the U.K. Treasury released a consultation paper to gather feedback from stakeholders concerning the government’s regulatory approach to cryptocurrencies and stablecoins. The responses to the consultation paper are being accepted until March 21.