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The downturn was part of a wider drop for digital assets, according to a report by Bloomberg News, which points out that the world’s most popular cryptocurrency fell to $75,709 at one point, while other coins saw larger losses.
The selloff erased around $111 billion from the crypto market’s total value in the space of 24 hours, the report added, citing CoinGecko data. Around $1.6 billion in short and long positions were liquidated in the same time frame, according to market tracker Coinglass.
The report also noted that bitcoin’s price could be affected by increasing tensions between Israel and Iran, but had seen no measurable impact from a sharp downturn in gold and silver prices last week.
“The levels right now are reading in pretty extreme disinterest” from retail investors, said Needham analyst John Todaro, who added that trading volumes could still be depressed for “another quarter or two.”
The Bloomberg report noted that a delay in new market structure legislation for the crypto industry has also dampened investor enthusiasm for digital assets.
As PYMNTS wrote last week, the legislation is happening as federal regulators are “building the machinery” to answer the crypto question.
The report pointed to a joint Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) event in which the heads of the two agencies argued that there needs to be clarity around the structure of the crypto markets before innovation can scale in a responsible fashion.
“That market structure clarity, however, showed growing pains on Thursday during the Senate markup,” that report said. “Amendments that would have banned federal officials from issuing or endorsing digital assets, cracked down on crypto ATM fraud and prohibited bailouts for crypto firms were all rejected along party lines.”
Making matters more complicated: The crypto legislation put forth by the Senate Agriculture Committee is only one half of the puzzle. Provisions dealing with securities regulation fall under the Senate Banking Committee’s jurisdiction and will need to be melded into a final package.
“That reconciliation process will test whether harmonization can survive partisan and jurisdictional divides,” PYMNTS wrote.
Meanwhile, analysts for Citi said last week that while the CLARITY Act could still pass this year, there is a growing chance it could be delayed past 2026. The bank’s analysts say the bill’s definitions around decentralized finance (DeFi) are the largest obstacle to progress on the crypto market structure legislation.
