The crypto market continues unimpressive performance as Bitcoin consolidates below $20k and Ether dips further following post Merge sell-off.
Bitcoin (BTC) again fell below the $20,000 mark on Sunday after losing more than $300 from its previous close. The world’s largest cryptocurrency by market cap fell by 1.54% to close at $19,804. As of writing time, BTC has lost at least another $1,000 and is trading at $18,600.
Generally, all of the crypto and financial markets seem to be continuing a bearish run this month. Last month’s Consumer Price Index (CPI) inflation data from the United States has caused a lot of panic as it indicates rising inflation at a 6.3% YoY increase. Furthermore, BTC is down 58.9% from its peak for the year. On March 29, the world’s largest coin closed higher than $47,000.
In recent months, the BTC price has held the $19,400 – $20,100 price range as support and continues to consolidate there. However, BTC could gain back to $22,000 if stocks recover their losses. During the mid-week period, BTC successfully breached $22,600 but failed to hold support at the $22,000 mark.
Ethereum Drops after the Merge, SEC Might Investigate ETH Following The Transition
Ethereum (ETH) recently concluded its Merge upgrade this week. The second largest crypto by market capitalization went through what is undoubtedly the most significant event in its history. The switch to the Proof-of-Stake (PoS) mechanism would reduce ETH’s energy consumption by nearly 100%, ensuring certain environmental benefits.
However, ETH dropped by nearly 18% this week following a successful Merge after several traders sold off their assets. Short-term investors bought ETH before the Merge to capitalize on the positive momentum and obtain new forked tokens. These investors immediately sold their positions after accomplishing their motives, leading to the fall.
On Thursday, the Security and Exchange Commission (SEC) chairman, Gary Gensler, said the commission might scrutinize ETH after the Merge. The SEC boss stated that the migration from Proof-of-Work (PoW) to Proof-of-Stake could prompt the SEC to regulate ETH as security. Additionally, Gensler noted that assets that allow staking might pass the Howey test. The Howey test is used to determine whether or not an asset qualifies as a security and should be regulated by the SEC. According to Gensler:
“From this coin’s perspective… that’s another indication that under the Howey test, the investing public is anticipating profits based on the efforts of others.”
Bitcoin Might Continue to Gain Acceptance Regardless of the Fall below $20,000
Despite the bear market, Bitcoin is still gaining adoption from some investors. Recently, financial services company Fidelity Investments announced it is considering allowing its brokerage customers to trade Bitcoin. According to a source close to Fidelity, the firm intends to expose its retail customers to crypto. Galaxy Digital Holdings Limited CEO Mike Novogratz hinted during his speech at the SALT conference that a source informed him about the plan.
Also, American-based multinational investment company BlackRock recently partnered with Coinbase to allow its customers access to Bitcoin. BlackRock seeks to use its investment management platform, Aladdin, to provide digital asset exposure for its customers.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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