The influence of the United States has hit the cryptocurrency industry yet again. After the statements of the Fed, announcing a pause in the rise in rates which will only be temporary, Bitcoin (BTC) faltered, falling below the 25,000 dollar mark, a low not reached for three months. A drop that once again weakens investors after the previous drop caused by the SEC attacks on Binance and Coinbase.
Another drop for the cryptocurrency market
A painful awakening for investors? After more than three months of bouncing between $26,000 and $31,000, the price of Bitcoin crosses the symbolic barrier of 25,000 dollars downwards. In just a few tens of minutes, its price fell by around 4%, taking all the altcoins with it.
🔴 Shortly after the FED announcements, the course of the #Bitcoin goes down and takes the altcoins with it $BTC pic.twitter.com/wRKCQKHM52
—Cryptoast (@CryptoastMedia) June 14, 2023
Almost no top 20 cryptocurrencies are spared : ADA, BNB, SOL and MATIC fell by 6.4%, 5.6%, 2.5% and 5.2% respectively. Only the UNI token, located in 20th position, recorded an increase of 3.7% over the last 24 hours. The native cryptocurrency of the largest decentralized exchange (DEX) take advantage of the excitement around Uniswap V4 to swim against the current of the market.
The reason for today’s fall once again lies on the other side of the Atlantic. Yesterday, the United States Federal Reserve (Fed), the central bank of the world’s leading power, announced that it expects a next rate hike by the end of 2023.
This market plunge adds to that which took place last week after the announcements of the Securities and Exchange Commission (SEC). As a reminder, the American institution has launched legal proceedings against Binance and Coinbase exchanges.
As a result, cryptocurrencies are recording heavy losses over the past 14 days: while market capitalization plunged 11%, thus losing the equivalent of 134 billion dollarsBTC and ETH each fell 7.3% and 11.3%.
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United States: too much influence on cryptocurrencies?
This is not the first time that a political decision, coming from the state led by Joe Biden, has influenced the price of cryptocurrencies. In December 2020, when the SEC attacked Ripplethe company behind the cryptocurrency XRP, market valuations were showing significant drops.
Moreover, for several years, the United States is also interfering in Web3 protocols to regulate their decentralized applications (dApps) according to their wishes, without consideration for their users.
In August 2022, the decentralized application Tornado Cash has been blacklisted by OFACan organization under the supervision of the US Treasury, to combat money laundering and the financing of terrorism.
To the great despair of its founder Satoshi Nakamoto, the first world power is not the only one to influence the price of cryptocurrencies : when in March 2020, States around the world announced containment measures to stem the Covid-19 epidemic, the drastic reduction in economic activities plunged the price of Bitcoin towards an unprecedented performance: -40% in just 5 days.
Finally, note that the arrival of institutions on the cryptocurrency market increases the correlation between Web3 valuations and the real economy. With the exception of the banking sector, whose various bankruptcies in March 2023 propelled the price of BTC to $30,000.
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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