New Delhi: The cryptocurrency market extended its losses on Tuesday ahead of the much-awaited US Fed meeting as investors sought signals for tapering and rate hikes.
As many as six out of the top 10 digital tokens were trading lower at 9.30 IST. Terra and Polkadot were holding mild gains whereas Cardano shed 6 per cent.
The global crypto market cap declined more than 5 per cent to $2.13 trillion mark compared to the last day. However, the total crypto market volume soared as much as 38 per cent to $97.03 billion.
Cryptocurrency products and funds posted net inflows of $88 million last week, data from digital asset manager CoinShares showed on Monday, amid a mixed investment flows picture in a week that saw a drop in prices.
The crypto market took a sizable hit over the past 24 hours after a profit booking session, said Edul Patel, CEO and Co-founder of Mudrex. “Total traded volumes jumped more than 40% as traders rushed for cover. Over the coming 24 hours, we can expect the market to remain volatile,” he added.
What’s cooking in India
Indian crypto investors are turning towards stablecoins that are pegged to real-world currencies like the US dollar as a hedge against rising volatility in Bitcoin and other altcoins like Ethereum, Solano, Polkadot, and Shiba Inu, even as the Indian government moves to regulate or ban crypto assets.
Ahead of the Fed’s meeting to decide on its monetary stance, markets have taken a major tumble. It seems many are pricing in the potential winding down of bond purchases and the commencement of rate hikes starting next year and are reducing their exposure to risk assets accordingly, said CoinDCX Research Team.
“Coupled with this, the ongoing debt crisis in China and Europe, as well as the excess ‘fat’ prevailing in global asset valuations, a bear market could very much be on the horizon. Calculated risk management is key at this juncture and leverage should generally be avoided” it added.
Bank of England Governor Andrew Bailey warned banks and other regulated financial firms on Monday that they should be “especially cautious” about holding volatile crypto assets until regulators put new rules in place.
Also, Abu Dhabi state fund Mubadala has invested in the ecosystem around cryptocurrencies, such as block-chain technology, given the increase in the digital currency’s market value, its CEO Khaldoon al-Mubarak told CNBC.
The Singapore affiliate of Binance, one of the world’s largest cryptocurrency exchanges, said on Monday it will withdraw its local license application and wind down its digital payment token business in the broadly crypto-friendly city-state.
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