Ahead of Wednesday’s critically important publication of Consumer Price Index (CPI) data, the global cryptocurrency market printed red indices on Tuesday. The total market capitalization has dropped by more than one percent in the last day, but it has managed to keep its value over the critical threshold of one trillion dollars. On the other hand, a significant contributor to the fall is the increased attention that the United States Securities and Exchange Commission (SEC) is exerting on digital business.
Will There Be Greater Volatility in the Crypto Market?
Over the past week, the values of the two cryptocurrencies with the largest market caps, Bitcoin (BTC) and Ethereum (ETH), have fallen by more than 5% and 8%, respectively. However, the recent drop in the price of cryptocurrencies was caused by a notification issued by a regulatory agency in the state of New York to stop the production of a stablecoin known as Binance USD (BUSD).
The recent action taken by the United States Securities and Exchange Commission (SEC) against Paxos, which is the issuer of BUSD, has had a significant effect on Binance’s BNB coin. According to the statistics, the price of BNB has experienced a precipitous decline of seven percent in the previous twenty-four hours. At the time of this publication, it is being sold at an average price of $293.
The investigation that a United States financial body is conducting surrounding BUSD, the third largest stablecoin, has caused the cryptocurrency market to suffer significant losses. Investors appear to be afraid and uncertain about the next action that the U.S. SEC will take. However, recent occurrences like the failure of FTX have already shaken the faith of market participants. Will the Crypto Market Crash After the Release of the CPI Data? Read Here to Find Out…
Stablecoins: Are They in Danger?
Concerns have been raised over the top two stablecoins, Tether (USDT), and USD Coin, as a result of the investigation into Paxos Trust Co. and BUSD (USDC). According to the data, around 342 million BUSD has been redeemed over the course of the last 24 hours.
Reports indicate that the Securities and Exchange Commission (SEC) of the United States will propose various rule modifications on Wednesday. Because of this, it might be challenging for hedge funds to collaborate with companies that are tied to digital assets. Nevertheless, investors await the publication of U.S. inflation statistics on Tuesday, which will immediately influence the trend for interest rates and the willingness to take risks.
