TL;DR Breakdown
- Crypto markets came tumbling after days of impressive gains.
- It isn’t clear what caused the crash, but it coincides with the signing of the infrastructure bill giving birth to raised speculations.
Crypto markets have plunged in the last 24 hours. It wasn’t immediately clear what had caused the fall. But speculation is rife as the nosedive coincided with the signing of the infrastructure bill.
President Joe Biden put pen to paper yesterday, turning the $1.2 trillion bill into law. Some analysts have suggested that the law will impact the crypto markets sector.
At press time, more than 155 thousand traders had liquidated their positions in the last 24 hours. That’s according to statistics from Coinglass.
The crypto information site placed the value of the most significant single liquidation order at $8.6 million. The said order happened on the Bitmex exchange and affected the XBTUSD pair.
Coinglass added that 88 percent of the liquidation orders were on long contracts. The total market liquidation on high long and short contracts stood at about $591 million.
Five exchanges with the most liquidation
Binance led in the top five exchanges that experienced the most liquidation. It recorded 33 percent of the total market figures, which is $196 million, of which about 92 percent were long positions.
In the second spot was the Okex exchange. Here, traders liquidated more than $150 million in crypto funds, representing 25 percent of the cashed-in contracts. Of these, 95 percent were long-term contracts.
FTX came in at third position with 19 percent of the terminated contracts. These amounted to $114 million, where 76 percent of the agreements were long.
Bybit and Bitmex round up the quintet. The former witnessed a movement of over $48 million, amounting to eight percent of all liquidated funds. Also, 88 percent of those liquidations were on long contracts.
On the other hand, Bitmex saw a movement of about $31 million. Ninety-five percent of these affected long-term agreements. Bitmex’s figure accounted for five percent of the market total.
Infrastructure Bill and crypto markets
The infrastructure bill, now law, contains proposals on how to spur the American economy. It has split opinions within the country.
Proponents have hailed it as the key to unlocking America’s economy. And president Biden echoed that much in the signing ceremony. He said its adoption signified America was moving again and that American lives would get better.
But the law has its fair share of critics. Among those unhappy with some of its provisions are crypto enthusiasts. They have expressed reservations about clauses they feel will negatively impact crypto markets.
A section of the new law mandates crypto exchanges to notify the IRS of transactions exceeding $10,000. That means that the transactions qualify for capital gains tax. This requirement is among the things that have riled the crypto community.
Crypto purists see this as going against the true intention of digital assets. They say it defeats the decentralization logic. Moreover, it’s an infringement on their privacy.
Consequently, they’ve been pushing for the law’s amendment. Their efforts have gained the support of prominent personalities. Among these are Twitter’s Jack Dorsey and Coinbase’s Brian Armstrong.
Pro crypto legislator Cynthia Lummis is among those fronting the amendment. The Wyoming senator insists that cryptos are here to stay.
She adds that certain decisions taken now will have far-reaching effects in the future. To her, legislation shouldn’t be stifling crypto markets. Instead, it should be encouraging their growth.
