The Bitcoin price drop is a major issue hitting today’s headlines as the concern over China and the caution in front of this week’s Federal Reserve meeting weighed heavy on the U.S. stock index futures. The speculations on Bitcoin stated that the United States government might declare stablecoins to be a risk to the complete financial system and probably could add uncertainty to the cryptocurrency market.
What Happened To Bitcoin Today? How Are Other Cryptos Affected?
As per the Bitcoin price news today India, Bitcoin (BTC) is the top cryptocurrency by market value and is currently (at the time of writing on 20.09.2021 at 10.40 AM GMT) is $44616.57 which is around 7.9% down or the Bitcoin price drop on the day. The other cryptocurrencies that are facing losses include:
- Ether (at the time of writing on 20.09.2021 at 10.44 AM GMT) is $3125.27 i.e, 8.37% down today.
- Cardano (at the time of writing on 20.09.2021 at 10.45 AM GMT) is $2.12 i.e, 10.28% down today.
- Solana (at the time of writing on 20.09.2021 at 10.47 AM GMT) is $140.85 i.e, 11.42% down today.
Note: The data has been acquired from CoinMarketCap at the stated time and date.
The S&P 500 futures, the main equity index of the Wall Street, and the worldwide benchmark for the risk assets are trading approximately 1% lower. Additionally, similar-sized losses are running in the European Stock Indexes and the shares of Japan and Hong Kong.
Why Is Crypto Market Down Today?
The crypto market has faced a significant nose dip in the share prices as the investors began dumping mining equipment following China’s announcement of the fresh regulations.
“Investors look to be taking risk off the table on fears that [a] crisis at China Evergrande Group may become a systemic problem to global markets,” Pankaj Balani, CEO of Delta Exchange, said.
“Markets will also be looking at the Fed commentary later this week to make sure that there are no changes in liquidity from the central bank.”
The Evergrande Group (formerly known as Hengda Group) fell over 10% in Hong Kong in the early morning today. This took the year-to-date drop by 85% on the concerns that the cash-strapped property giant might default on the $83.5 million in interest payments that are due this Thursday (23.09.2021). The Chinese authority has already mentioned that the major lenders that the Evergrande Group is likely to miss the payments. However, some of the observers have referred to the Evergrande crisis as China’s “Lehman Moment”. Mira Christianto of Messari stated that such fears are overblown.
The two-day fed meeting is about to conclude on Wednesday (22.09.2021) and the investors will keenly watch it for clarity on the plans of the Central Banks for scaling back or tapering the liquidity boosting program.
In the recent weeks, the communications from the Fed members have been aggressive and many have called for the start of tapering before the year-end. In general, BTC and other asset prices might face selling pressure if the meeting of this week confirms that the tapering is likely to begin in October or November.
The greenback or the bank bill (dollar) is seen to be rising of the Fed meeting and reflects a flight to the safety and speculation, the Central Bank might signal the taper in October or November. The dollar index that tracks the value of the currency against the major fiat currencies has leaped to a one-month high of 93.34 that extends a two-day winning streak.
Keeping aside the macro factors and impending regulatory action on the stablecoins, the dollar-pegged crypto coins that promise stability and perform as a gateway to the crypto markets could likely add to the selling pressure around Bitcoin.
The New York Times had published an article on Sunday (19.09.2021) that mentioned that the U.S. regulators are much concerned about stablecoins that might become a source of volatility and then probably bring the dollar-pegged currencies under the regulatory horizon by declaring them as a risk to the existing financial system or even treat them as securities. Banks or money market mutual funds. Washington’s distress with stablecoins is pretty old, the fact that the mainstream media outlets covered a story that suggests that the regulation is coming soon.
The latest report has mentioned that the officials are now considering launching a Financial Stability Oversight Council formal review into whether the stablecoins will pose an economic threat. This process could introduce more severe oversight on the extensively expanding industry. Considering Tether (USDT) and all stablecoins, the total market capitalization has experienced a nearly 10-fold rise to $115 billion in the past 12 months. However, a regulatory crackdown might bring in short-term agony to the cryptocurrency markets.
All of these concerns together with the quarterly Bitcoin options are about to expire this Friday and it may retain the week under crypto volatility. However, Balani mentioned that the underlying trend will be remaining to be bullish while the Bitcoin price drop holds over $40,0000.
The past data reveals that the September dip has attracted larger bull runs, especially those that are seen post a halving year. In May last year, BTC underwent its third mining reward halving. The first and the second halvings occurred in 2012 and 2016 respectively.
Bitcoin price USD has dipped to 1.37% in September 2013 solely to recover from $100 to $1,100 in the next two months. The Bitcoin price drop had staged a similar recovery following September 2017’s dip of 8%.
FAQ On Bitcoin Price Drop
The analysts have remained divided over the long-term track of the crypto market. Standard Chartered, the British banking giant noted that Bitcoin’s value could hit the new all-time highs somewhere around late 2021 or at the beginning of 2022. However, other forecasts state that the latest trends might result in lows below $20,000 by the end of this year.
Some panelists have expected that by December 2030, the BTC price will go up to $4,287,591. However, the average is skewed by the outlier. When we have a glance at the median price prediction, the 2030 BTC price forecast drops down to $470,000.