Crypto Market Plummets: Ether Wipes Out Shanghai Rally Gains Amidst Bitcoin’s Price Drop

"Ether (ETH) plunges to a two-month low, erasing recent rally gains"

Ether (ETH), the second-largest cryptocurrency by market capitalization, has hit a low of $1,833, its lowest price since April 9, according to CoinDesk data. This marks a decline of more than 13% from its Tuesday high of $2,118, resulting in the erasure of all price gains from the recent rally following the seamless implementation of the highly anticipated Shanghai upgrade. In the past 24 hours, ETH has fallen by 5.3%, as investors continue to weigh macroeconomic and crypto-industry focused uncertainties that have afflicted the wider digital asset market.

The Ethereum blockchain has been undergoing a transformation from a proof-of-work to a more energy-efficient proof-of-stake protocol. The April 12 hard fork was the last major step in this transformation, enabling withdrawals of some $35 billion worth of tokens locked in staking contracts. ETH began spiking a day after the event and surged to its highest level in 11 months. It had been lingering below $2,000 for most of the past year. However, ETH’s steady decline since Tuesday has come amid a wider price slump.

Bitcoin, the largest cryptocurrency by market capitalization, has also been showing weakness in the past few days. It was recently trading at about $27,200, down more than 3% over the past 24 hours and has tumbled more than 10% from a high Tuesday comfortably above $30,000. Concerns around sticky inflation, stock market earnings, and looming recession have dragged prices lower, according to Edward Moya, senior market analyst of foreign exchange market maker Oanda, who spoke on CoinDesk TV on Thursday.

The wider digital asset market has been affected by these uncertainties. Investors are weighing the impact of the COVID-19 pandemic, which has caused significant disruptions in the global economy. Additionally, there are concerns around the regulatory environment, particularly in the US, where the Securities and Exchange Commission (SEC) has been cracking down on cryptocurrency companies that have conducted initial coin offerings (ICOs) without registering with the regulator. The SEC has also been investigating cryptocurrency exchanges and other platforms for potential violations of securities laws.

Despite these challenges, the cryptocurrency market has been growing rapidly in recent years. Many investors see digital assets as a hedge against inflation and a way to diversify their portfolios. Institutional investors, in particular, have been showing increasing interest in cryptocurrencies, with several major financial institutions, including Goldman Sachs and JPMorgan, launching cryptocurrency trading desks or offering cryptocurrency products to their clients. The growth of decentralized finance (DeFi) has also been a major driver of the cryptocurrency market, with many new projects launching in this space in recent months.

Looking ahead, the cryptocurrency market is likely to face continued volatility as investors navigate these uncertainties. However, many experts believe that the long-term outlook for digital assets remains positive, as more investors look to diversify their portfolios and gain exposure to this emerging asset class. As the regulatory environment becomes clearer and the technology continues to mature, the cryptocurrency market is likely to become an increasingly important part of the global financial system.

Martin Reid

Martin Reid

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