Crypto Roundup — May 24th

Anxiety has washed over the crypto market, with cascades of selling push prices down to the same levels as before Tesla announced its treasury allocation.

Tweets from CEO have been widely blamed for giving the market jitters, which turned to full-blown fear as for a crackdown on Bitcoin mining and trading. The leading cryptoasset dropped to hit nearly $30k on the news, before bouncing back to over $35K.

Pulling Bitcoin down further, the U.S. Treasury called for stricter rules for crypto, and amidst the volatility. This caused carnage that swept over the entire market, with most altcoins flashing double-digit losses, and and falling around 50% over the last seven days.

This Week’s Highlights

  • China warns of crypto crackdown
  • U.S. Treasury seeks to toughen tax rules

China warns of crypto crackdown

Bad news from China will be a familiar theme to veteran traders, as announcements from Beijing sparked similar sell-offs in 2013 and 2017.

Nevertheless, news of China’s intentions to “” hit the market like a ton of bricks. Rumors quickly spread that miners were the country, and selling both mining equipment and large amounts of Bitcoin.

At the same time, several market commentators were quick to point out the potential upside of the situation. CEO and Bitcoin bull tweeted that “a crackdown on miners in China would radically reduce the carbon footprint of Bitcoin mining” and would support progress towards sustainable solutions.

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U.S. Treasury seeks to toughen tax rules

To match the news from China, the has called for stricter compliance to prevent the possibility of tax evasion. Specifically, the Treasury said it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service.

Joining the chorus of critics, U.S. Federal Reserve chief said in a video message that crypto poses risks to financial stability, and that “greater regulation may be warranted.”

The week ahead

The weakened market sentiment is quantified by the , which is now showing levels of panic not seen since the pandemic-induced crash of March 2020.

Some analysts see this fear as a buying opportunity, and of Bloomberg Intelligence has even gone so far as to call the downturn a discounted bull market.

Yet at over 50% down from all-time highs, many traders are now likely to be cautiously watching for further developments in China before making the next move.

Written by a team of experienced financial analysts at eToro.

This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results.

Employee at Delta Crypto Portfolio Tracker

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