Why did the crypto market crash today? Here are the top 6 reasons
Lark Davis, a popular cryptoanalyst and content creator, recently highlighted six potential factors that could affect the cryptocurrency markets, especially Bitcoin and Ether, in the coming months.
Mt.Gox Creditor Deadline
March 10 is the deadline for Mount Gox creditors to receive the coins back. A total of 142,000 Bitcoins will enter the market in the coming months, with two groups of creditors controlling about 20% of that Bitcoin already saying they are taking back 90% of what they are owed in Bitcoin and 10% in cash. However, the fate of the other 80% of these Bitcoins remains uncertain. Although some may hold onto their coins, selling those coins can cause short-term price turbulence.
Inflation data release and Federal Reserve meeting
The upcoming release of inflation data on March 14 and the Federal Reserve meeting on March 22 will also have an impact on the market. If inflation rises unexpectedly, it could spell bad news for the markets. But if inflation falls, the market is likely to be bullish. How the Federal Reserve approaches rate hikes on the 22nd will also be affected by inflation rates.
Regulatory madness
The regulatory crackdown on crypto by the SEC in the US has been one of the craziest FUDs in recent weeks. They are attacking staking, stablecoins and exchanges, as well as trying to de-bank crypto companies in the US. The official ruling from the SEC is expected to be released soon, and many expect more bad stories to come.
Silver Gate Bank collapse
Silvergate Bank was the go-to bank for many cryptocurrency exchanges and major market players for ramping fiat currency into and out of crypto. They were massively exposed to FTX and lost about a billion dollars in the fourth quarter of 2020. Although the overall impact on crypto is not expected to be that severe, the story could still have the potential for unexpected chaos if some players are caught lying about their exposure their. .
Tether R&D
Following the SEC’s hit on the B USD stablecoin and its issuer, Paxos, a Wall Street Journal article claims that Tether used false documents to open bank accounts for its dollar deposits. Tether has long been a difficult issue in crypto, and if it were to collapse, it would completely crash the markets. However, USD C and Di would take market share from Tether, but the short-term impact would be brutal.
Ethereum’s Shanghai Upgrade
In April, Ethereum’s Shanghai upgrade is expected to take place, which has sparked concerns about the potential unlocking and sale of millions of Ethereum currently staked. Although some validators may leave the market, it will take about a year for everyone to get out if they want to. Thus, the potential impact on the market is expected to be limited.
