On Monday, cryptocurrency prices hit new lows as a result of regulatory worries and a general investor reluctance to invest in risky assets due to impending interest rate increases.
By market value, Bitcoin, the most valuable cryptocurrency, dropped about 5 per cent to a three-month low of $18,387.
The second-largest cryptocurrency, Ether, fell 3 per cent to a two-month low of $1,285 and has lost more than 10 per cent of its value in the previous 24 hours. The majority of the smaller tokens had larger losses.
Over the weekend, a significant upgrade to the Ethereum blockchain—which supports the ether token—called the Merge changed how transactions are handled and reduced energy consumption.
The value of the token has decreased amid rumors that comments made last week by Gary Gensler, chairman of the U.S. Securities and Exchange Commission, suggested the new structure might draw additional regulation. The upgrades’ surrounding trades were also unwound.
“It’s speculation as to what might or might not happen,” said Matthew Dibb, COO of Singapore crypto platform Stack Funds, on the regulatory outlook.
“A lot of the hype has come out of the markets since the Merge,” he said. “It’s really been a sell-the-news type of event,” he added, given the nervous global backdrop, and said ether could test $950 in coming months.
“Looking at the landscape right now, both fundamentally and technically, it’s not looking great. There’s no immediate bullish catalyst that we can see that’s going to prop up these markets and bring in a whole lot of new money and liquidity.”
(Adapted from TheGlobeandMail.com)