NEW YORK: Bitcoin slashed its value by a fifth on Saturday as profitability and macroeconomic concerns led to sales of nearly $1 billion in cryptocurrencies.
Bitcoin was down 12 percent to $47,495 at 0920 GMT. It fell to $41,967.5 during the session, bringing the total loss for the day to 22 percent.
Cryptocurrency sales on a large scale have seen Ether, the currency linked to the Ethereum blockchain, drop by more than 10 percent.
According to cryptocurrency database Coingecko, the market capitalization of the coins tracked by 11,392 has fallen by nearly 15% to $2.34 trillion. That value briefly crossed $3 trillion last month as Bitcoin hit a record $69,000.
Falling week in the wake of financial market volatility. Global stocks and record US stocks fell on Friday after data showed that job growth in the United States slowed in November and that the Corona virus alternative Omigron was keeping investors on edge.
Justin De Anethan, head of sales for the Hong Kong-based cryptocurrency exchange Equinex, said he has been watching foreign exchange rates rise across the cryptocurrency markets and major stockholders transfer their coins from their wallets to exchanges. The latter is usually a sign of intent to sell.
“It appears that the crypto whales have moved the coins into the trading arena, using a positive bias from retail and forex traders and then lowering prices,” he said.
The sale comes ahead of the testimony of the executives of eight major cryptocurrency firms, including Coinbase Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried, before the US House of Representatives Financial Services Committee on December 8.
This investigation marks the first time that key stakeholders in the cryptocurrency markets have testified before US lawmakers as policy makers pick up on the implications of cryptocurrencies and how to better regulate them.
Last week, the US Securities and Exchange Commission (SEC) rejected a second Wisdom Tree fund plan for exchange-traded funds.
Data from another site, Coinglass, showed that nearly $1 billion in cryptocurrency has been resolved in the past 24 hours, with the bulk of the digital exchange being at Bitfinex.
The drop in Bitcoin financial rates — the cost of holding bitcoin by Perpetual Futures, which peaked at 0.06 percent in October — shows that traders are getting tough.
The financial ratio on crypto exchange BitMEX fell to minus 0.18 percent from 0.01 percent for the most part in November.