BTC slides to $52k ahead of $6 billion options expiry on Friday
A record $6 billion cryptocurrency option contracts expire on Friday and as a result, Bitcoin slides to the $50k mark for the first time in two weeks. The largest cryptocurrency has dropped by about 15% since its record high of $61,742 on March 14 and is currently trading at $52,522 as of March 26, 13:30 IST. There are warnings of the ‘max pain’ point which means buyers have the most to lose and sellers the most to gain if the price of BTC plunges to around $44,000. However, Bitcoin is still trading 700% higher over the past year.
The U.S stock markets were trading lower on Thursday below their record highs and the European and Asian markets showed signs of weakening too which could potentially dampen sentiments in the crypto markets. The U.S dollar has appreciated in the foreign exchange market which is often negatively correlated to Bitcoin price. The Fed stimulus-induced optimism in the crypto industry seems to be weakening too as the US economy recovers and speculation grows that more of the checks will be spent in the economy rather than buying crypto assets among the retail investors.
Blockchain data shows bullish signs
Despite the dip, there are some bullish indicators as the blockchain data from Glassnode show that in large numbers Bitcoin has been withdrawn from cryptocurrency exchanges as investors take advantage of the dip in prices. According to Glassnode, over 1,365 BTCs were withdrawn from exchanges in 24 hours through 12:00 UTC Thursday which has been the highest withdrawal for a 24-hour period in 2021 so far.
Grayscale Bitcoin Trust
Bitcoin’s worst selloff since December 2020 has particularly affected the largest fund tracking cryptocurrency, the $29.4 billion worth Grayscale Bitcoin Trust. The fund was down by 20% this week as of 25 March according to the data compiled by Bloomberg.
Bitcoin goes commercial as you can now buy Tesla in Bitcoin
A step further towards making cryptocurrencies commercial, Elon Musk, the CEO of Tesla announced that people can start buying Tesla products in BTC which increased the digital asset’s price to $57,000 level on Wednesday before the dip on Thursday ahead of contract expiry.
Non-Fungible Tokens (NFTs)
NFT continues to gain traction as recently, an auction for NFT tied to Kevin Roose, a New York Times columnist has been sold for 350 ETH worth around $5,60,000 at current prices. Jack Dorsey, the CEO of Twitter sold his first tweet for a specific price of $2,915,835.47 in an auction via a platform called Valuables by Cent that allows people to make offers on tweets “autographed by their original creators.”
Ether faces near-term pressure
Ethereum, the world’s second-largest cryptocurrency with a market cap of about $186 billion is also plunging in value and is down about 13% since its weekly high of $1860. It is currently trading at $1,620 as of 12:50 pm IST on 26 March.
Binance Coin (BNB) is currently trading at $242, down by 8.7% since last week. Cardano (ADA) is currently at $1.13, down by 10% in price since last week. Litecoin (LTC) is currently trading at $175, down by 13% since last week. Chainlink (-16%), BCH (-10%), EOS (-11%) BAT (-14%), and XLM (-7.5%) are all in red since last week while XRP (+12%) and Tron (7%) have shown an upward trend. A new entry in the top 10 cryptocurrencies which has made headlines is THETA. It has made significant gains in value with a market cap of $12 billion and has grown by 60% over the past week.
While all eyes are on the options expiry and will determine the movement of crypto markets in the short-term, the Government of India has announced that dealing in cryptocurrencies require disclosure by companies with details of P&L, amount of currency held, deposits or advances of users trading in cryptocurrency. Although the crypto bill is still being discussed in the parliament, such an announcement is a great development in regulating the crypto industry in India and CoinDCX has been an advocate for regulating the industry since its inception. That is all in the crypto space for now. We will be back again with crypto insights next week.