Bitcoin, the world’s largest cryptocurrency, saw a decline in its price as it hovered around $26,500 in Friday afternoon trade in Asia. This came after it hit a two-month low of $25,400 earlier in the day. The depreciation of the Chinese yuan and the bankruptcy of Chinese property giant Evergrande in the U.S. had a negative impact on investor sentiment for risk assets, including cryptocurrencies. Additionally, the news that the U.S. Securities and Exchange Commission (SEC) received approval to file an interlocutory appeal in its lawsuit against Ripple Labs caused further anxiety for investors, leading to a decline in the price of Bitcoin and other top cryptocurrencies like XRP.
Bitcoin’s price dropped 7.59% to $26,413 in a 24-hour period, resulting in weekly losses of 10.08%. Its market capitalization also decreased by 6.80% to $516.53 billion. The decrease in price was influenced by Elon Musk’s SpaceX reducing its Bitcoin holdings of $373 million and the news of the SEC’s appeal in the XRP ruling. Despite this, some analysts remain hopeful in the medium to long term, citing possible rate cuts that would favor risky asset investments and the potential approval of Bitcoin spot exchange-traded funds in the U.S.
Many asset managers in the U.S. are eagerly awaiting SEC approval to launch several spot Bitcoin exchange-traded funds (ETFs), including BlackRock. The delayed decision on Ark Investment’s spot Bitcoin ETF application has pushed back the deadline as the agency solicits public comment on the proposal. A U.S.-listed Bitcoin ETF could have a significant impact on the cryptocurrency market, as it would attract new users and fresh capital into the asset class.
Ripple’s XRP experienced the largest loss among cryptocurrencies, dropping 14.02% in the last 24 hours to $0.5065. This decline came after the SEC was granted permission to file an interlocutory appeal in its lawsuit against Ripple Labs. Ripple’s CEO, Brad Garlinghouse, expressed his disagreement with the SEC’s claims, stating that XRP is not a security.
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The overall crypto market capitalization dropped 6.30% to $1.06 trillion, while crypto market volume increased by 96.63% to $70.05 billion. Non-fungible token (NFT) sales volume rose by 34.11% to $20.46 million. Ethereum was the top blockchain by NFT sales volume, followed by Solana and Polygon. The Bored Ape Yacht Club and DeGods collections were among the top sellers in the past 24 hours.
In global equities, most Asian markets ended the day with losses, with Hong Kong’s Hang Seng Index experiencing the biggest drop of over 2%. China’s Shanghai Composite and the Shenzhen Component Index, as well as Japan’s Nikkei 225 and South Korea’s Kospi, also declined. Investor sentiment was negatively affected by the bankruptcy filing of Evergrande and the struggles of other real estate companies in China. Nomura Holdings Inc. lowered its growth forecast for China, adding to concerns about the country’s economic outlook.
U.S. stock futures weakened, with the Dow Jones Industrial Average futures, the S&P 500 futures, and the Nasdaq 100 Futures all in the red. Economists have lowered growth forecasts for China, citing disappointing economic data and slower post-Covid recovery. In Europe, bourses fell, with the benchmark STOXX 600 and Germany’s DAX 40 declining. Investors are worried about higher interest rates in the U.S. and increasing credit risks in China.
Overall, the cryptocurrency market, along with global equities, experienced declines due to various factors such as regulatory uncertainties, economic concerns, and geopolitical risks. However, some analysts remain optimistic about the long-term prospects of cryptocurrencies like Bitcoin, especially if there is an approval of Bitcoin ETFs in the U.S.
