10 Factors Behind the Crypto Market's Downfall This Week

Check out Why the Crypto Market is Down This Week.

POSTED : 25-AUGUST -2023 Nilesh Hembade

The crypto market's total value fell by 8% between Aug. 15 and Aug 25, hitting a 2-month low at $1.02 trillion.

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This decline led to significant liquidations on futures contracts, reminiscent of the FTX collapse in November 2022.

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Rising interest rates (above 5%) and persistent inflation (above 2%) increased borrowing costs for households and businesses, impacting spending and investment.

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Inflation is projected at 3.6% for 2024, and high wage growth (5.5% YoY) could prompt the Federal Reserve to raise interest rates, favoring traditional investments over cryptocurrencies.

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The Federal Reserve's efforts for a "soft landing" indicate less likelihood of a severe recession, momentarily weakening Bitcoin's appeal as a hedge.

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Hopes for a Bitcoin ETF approval were dashed as the SEC continued to delay decisions due to concerns about manipulation safeguards, causing disappointment.

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Trading on unregulated offshore exchanges using stablecoins raises authenticity concerns, casting doubt on the true nature of market activity

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Financial troubles within the Digital Currency Group (DCG), including a subsidiary's large debt to the Gemini exchange, are impacting the market.

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Genesis Global Trading's bankruptcy, linked to losses from Terra and FTX collapses, could lead to forced selling of Grayscale Bitcoin Trust positions.

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Regulatory actions against Binance, accusations of misleading practices, and lawsuits against Coinbase for crypto classification as securities contribute to market uncertainty.

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