On Monday, cryptocurrency prices hit new lows as a result of regulatory worries and a general investor reluctance to engage in risky assets due to impending interest rate increases. The market value of Bitcoin, the largest cryptocurrency, dropped roughly 5% to a three-month low of $18,387.
The second-largest cryptocurrency, ether, fell 3% to a two-month low of $1,285 and has lost more than 10% of its value in the previous 24 hours. The majority of the smaller tokens had larger losses. Over the weekend, a significant upgrade to the Ethereum blockchain—which supports the ether token—called the Merge changed how transactions are handled and reduced energy consumption.
The value of the token has decreased amid rumours that comments made last week by Gary Gensler, chairman of the US Securities and Exchange Commission, suggested the new structure would draw additional regulation. The upgrades’ surrounding trades were likewise unwound.
The regulatory outlook is guesswork, according to Matthew Dibb, COO of Singapore’s Stack Funds cryptocurrency platform. Since the Merge, the markets have shed a lot of their excitement, he claimed. Given the uneasy global backdrop, he continued, “It’s really been a sell-the-news type of event,” and predicted that ether would test $950 in the near future.
“From a fundamental and technical standpoint, the current situation does not look promising. There isn’t a clear quick positive catalyst that will support these markets and inject a tonne of fresh cash and liquidity, in our opinion.