BTC, ETH, ADA, XRP: Why Is the Crypto Market Down Today?

Today, risk assets are broadly down, as investors appear willing to take a breather from the hyper-bull market we’ve seen of late. Investors may also note that cryptocurrencies are taking a hit today as well. With the crypto market down, many speculators are feeling the effects of what looks like an economy returning to normal.

Among the factors at play today are rising U.S. treasury yields. The 10-year U.S. Treasury bond yield just passed 1.5% today for the first time in three months. Additionally, the two-year yield is sitting at an 18-month high of 0.28% at the time of writing.

While these rates are still historically low, rising bond yields suggest investors are likely to take a pause from risk assets, which are reliant on record-low interest rates for their heightened valuations. Given the fact that the crypto market is among the riskiest and most volatile markets out there, investors looking down on risk assets are taking a look at their exposure to crypto today.

Related articles

21Shares files S-1 application for an XRP ETF

1 November 2024

Ripple CEO optimistic about crypto post-election, regardless of outcome

24 October 2024

That said, there are a couple other factors that appear to be driving the crypto market today. Let’s dive in.

Why Is the Crypto Market Down Today?

Among the crypto-specific catalysts driving the crypto market down is continuing regulatory overhang. Today, investors appear to be concerned about new proposed legislation that would allow crypto assets to be tracked. The Treasury Department and other agencies are looking to track crypto mining and use cases worldwide. With this shift potentially coming to U.S. soil, investors appear to be showing signs of worry.

Indeed, this announcement follows yet another move by China to tighten its grip on the crypto markets. While China has imposed various bans on the crypto market in the past, its latest outright ban of crypto mining and crypto ownership in China appears to be one that’s causing worry. As the world’s largest crypto market, investors have been digesting how likely it is that this ban is enforceable in crypto prices of late. Accordingly, additional scrutiny by U.S. regulatory agencies appears to be driving overly negative sentiment right now.

ADVERTISEMENT

As various crypto exchanges and crypto-related businesses look to get out of China, perhaps the damage has already been done. Indeed, this will be the latest test of how truly decentralized and outside of government control the crypto market is. For many investors, now is simply too scary of a time to be invested heavily in crypto. Accordingly, it’s likely we’ll see some continued volatility from here in the crypto world.