Crypto markets are living up to their reputation as the “Wild West of trading” thanks to volatile moves again this week. After reaching record highs last week, most major cryptos dropped with Bitcoin on Tuesday though they showed signs of improvement in Wednesday’s markets.
Instead, Bitcoin fell 7.3% and Ethereum dropped 9.2% early in the week. Other major cryptos experienced a similar move. In Wednesday’s trading, bitcoin recovered slightly, gaining 0.23% in early trading to $60,294 per coin while Ether gained 0.46%.
Binance Coin dropped by 7.42% to $590.40. Solana dropped to $224.38, down by 6.81%. Cardano and Ripple dropped by 4.87% and 6.59% to $1.93 and $1.11, respectively.
The moves showcase the volatility of the crypto space.
China ‘Bans Crypto’ Once Again
But what caused the move? Some reports claimed that China is behind the dip. The country’s leading agency, National Development and Reform Commission, attacked crypto again.
They repeated the official view that crypto mining is “extremely harmful” due to its high energy demands. They also cited crypto mining’s effect on carbon emissions, vowing to put a stop to it.
Most seasoned investors don’t think that much of Chinese comments. China’s negative view on crypto is nothing new, and many traders question what has changed.
Still, negative Chinese comments have affected crypto markets in the past.
Twitter Won’t Buy Bitcoin – Yet
Another potential catalyst is the news from Twitter.
Ned Segal, CFO of Twitter, stated that the social media company won’t get into crypto just yet – at least with regard to its balance sheet.
Twitter will not be buying any crypto assets just yet, he said. The move “doesn’t make sense right now” he stated.
“We have to change our investment policy and choose to own assets that are more volatile,” Segal elaborated.
Twitter prefers to hold less volatile assets. Latest filings show that the company held some $3.47 billion in cash and $3.94 billion in other liquid assets.
Some investors might have expected that Twitter would invest in crypto. In particular, the company has Jack Dorsey, a prominent Bitcoin maximalist as CEO.
In fact, Twitter has just recently assembled a dedicated crypto team, to help develop a decentralized social media platform. In that light, the new announcements seem to be of relatively minor significance.
Volatilty Is Nothing New
The news that catalized the drop does not seem to be catastrophic for crypto. Rather, it seems to be just an expression of the volatility of the space.
For some, this might be a good opportunity to get into crypto – at a slight discount.