News updates May 06, 2022

06 May, 2022 10:46 am

1. Bitcoin (BTC) Price Plummets 10% Following Sharp Decline on Wall Street:

* The Bank of England issued a warning on inflation on Thursday.

* 97% of the firms included in this S&P 500 were losing money.

Coincident with the sharp decline on Wall Street, Bitcoin’s price fell to its lowest level in more than two months. As per CMC data, BTC prices fell from $38,800 to $36,300, down almost 10% in the last 24 hours, indicating that the world’s most valuable cryptocurrency has fallen drastically in only three hours.

*Rising Inflation Around the Globe*

In the immediate wake of the Federal Reserve’s announcement that the U.S. benchmark interest rate will rise by half a percentage point, BTC saw a steep drop in value. Bitcoin struggled to break beyond the $40,000 barrier, as seen by the recent market turbulence. As the stock market in New York took a beating on Thursday afternoon, Bitcoin’s price continues to move in lockstep with it.

As of Thursday, the S&P 500 was on the verge of experiencing its worst trading day since June 2020 after Wednesday’s record-breaking one-day rally. According to Bloomberg statistics, 97% of the firms included in this index were losing money. Economic experts had predicted that the current cost-of-living problem would be short-lived, but now they are worried that central banks throughout the globe may struggle to keep inflation under control.

The Bank of England issued a warning on inflation on Thursday, predicting that it would climb throughout the year and reach as high as 10%, putting further pressure on households. According to economists in major countries, a recession may be verified when a country’s GDP decreases for two consecutive quarters.

Jerome Powell’s statement that the Federal Reserve was not contemplating an interest rate rise of 0.75 percent in the short term initially brought comfort to the markets. Still, he also hinted that there would be another 0.5 percentage points of interest rate hikes in June and July.

2. Bitcoin price hits 10-week lows as $40K spike becomes 'nasty bull trap'

Bitcoin (BTC) hit its lowest level in over two months later on May 5 as Wall Street trading saw volatility return with a bang.

*DXY celebrates as stocks, crypto tumble*

Data from Cointelegraph Markets Pro and TradingView painted an unsettling picture for hodlers as BTC/USD fell to $36,520 on Bitstamp.

Capping losses which totaled 8.3% at one point, Bitcoin only bounced at a price last seen on Feb. 24 this year.

As Cointelegraph reported, the performance had come in tandem with mayhem in U.S. markets as equities gave up previous gains to flip bearish on the economic outlook. The Federal Reserve's "priced in" rate hikes thus appeared to have been something of a red herring.

BTC breaks below 37k after a nasty bull trap yesterday. Good lesson to many who continue to insist on fighting the trend," popular trader Cheds reacted on the day.

At the time of writing, BTC/USD traded at around $37,000, having recouped a modest portion of the ground given up in the first two hours of the Wall Street session. Comparatively, the Nasdaq 100 was 4.5% down and the S&P 500 3.2%.

Even news that Blockchain protocol Terra had purchased a giant $1.5 billion of BTC to back its TerraUSD (UST) stablecoin failed to lift the mood.

"Can you imagine how disastrous this will be for central bank credibility (trust in the fiat system) if this equity market keeps unwinding in the coming weeks and they need to aggressively reverse policy within a month or two. Trust is already in shambles…," podcast host Preston Pysh commented as relative stability returned

The action was a boon for the U.S. dollar, meanwhile, as shown in the U.S. dollar index (DXY) reversing earlier losses to retest its highest levels in twenty years.

DXY stood at near 104 at the time of writing, up 1.2% on the day.

*Bulls feel the pressure most since January*

Amid the chaos, previous bullish theories on BTC covering longer timeframes received a major test of their own.

Related: ‘More likely’ BTC price will hit $100K before Bitcoin sweeps $30K lows, forecast says

Among them was that based on Bitcoin's on-balance volume (OBV).

OBV, a cumulative volume measure used to identify buying and selling pressure, has in fact been calling for BTC price upside since the $32,000 lows in January, popular Twitter account IncomeSharks claimed earlier on May 5.

A series of higher lows since had given the impression that serious downside could be averted based on OBV data.

As Cointelegraph reported, however, price targets of $30,000 or lower in the coming months only increased in the past few weeks.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

3. Court orders BitMEX co-founders pay a total of $30 million in CFTC civil case:

The Commodity Futures Trading Commission (CFTC) has hit the founders of crypto exchange BitMEX with a total of $30 million in civil monetary penalties.

US regulators lodged suits against BitMEX and its executive team in October 2020. An August 2021 settlement found that BitMEX facilitated the trading and processing of swaps without the necessary CFTC licensure. In addition to failing to register with the CFTC, that order also found the firm failed to implement sufficient anti-money laundering and know-your-customer checks.

That outcome required the firm to pay a $100 million penalty and barred it from offering derivatives products in the US.

Now, a consent order from the futures regulator requires co-founders Arthur Hayes, Benjamin Delo and Samuel Reed to each pay $10 million for violations of federal commodities laws. It also bars them from further violations of the Commodity Exchange Act and CFTC regulations.

In addition to those civil charges, there is a parallel criminal action against the co-founders. The US Attorney’s Office for the Southern District of New York indicted Hayes, Delo and Reed on charges of willfully violating the Bank Secrecy Act. All three have entered guilty pleas, and Hayes has requested probation with the ability to travel abroad ahead of his sentencing hearing.

4. Fintech Firm Bitlocus to Launch Crypto-Friendly Visa Debit Cards

Bitlocus – a global emerging fintech company based in Lithuania – announced on Thursday that it has partnered with Estonia-based fintech company Striga, which develops tech infrastructure for crypto companies, to roll out crypto-friendly debit cards for its customers across the European Economic Area and the globe.

Bitlocus said that the crypto-enabled debit cards will enable its clients to use their cryptocurrencies to buy goods and services just the way they spend traditional currencies where Visa is accepted globally. Backed by the Visa network, the Bitlocus card platform connects with people globally as well as over 70 million merchant locations worldwide.

Bitlocus mentioned that the cards will allow its customers to spend their crypto funds on POS (Point of Sale) devices, make online purchases, and withdraw cash from ATMs.

The crypto cards will benefit both retail customers and business clients, Bitlocus stated. While the card will allow all users to make payments with their tokens listed on the Bitlocus exchange, it will provide business clients with an opportunity to have their brand on the card.

5. Number goes up: A third of Brits have bought crypto, says Coinbase report

Bitcoin (BTC) number go up technology is boosting crypto adoption in the United Kingdom. More and more Brits are buying cryptocurrency, according to a Coinbase research piece carried out by Qualtrics.

The key takeaways indicate that 33% of British people own crypto, up from 29% in October 2021. Plus, over half, or 61%, of those surveyed intend to increase their holdings over the next 12 months.

For Danny Scott, CEO of the United Kingdom's leading Bitcoin exchange, CoinCorner, the statistics "seem incredibly high." Scott suggested that "we're seeing a quiet period from the retail market right now," adding that "when the price settles, so does the interest from newbies."

6. Bitcoin Getting Obliterated as Dollar Index Surges to Highest Level in Decades

King Dollar has reached the highest level in two decades against a basket of other top fiat currencies as Bitcoin keeps getting pummeled

The Bitcoin price has collapsed more than 8% over the past 24 hours. The world’s largest cryptocurrency is getting pummeled together with U.S. stocks.

Tech stocks have erased hundreds of billions of dollars, with the Nasdaq Composite index heading for its worst day since June 2020 after plunging 5%. The shares of tech giants, such as Amazon, have shed as much as 7%.

Cryptocurrencies and stocks have been struggling to regain ground since the start of the year due to the U.S. Federal Reserve’s hawkishness. As reported by U.Today, the Fed raised the benchmark interest rate by 50 basis points for the first time since 2000. The central bank is determined to reduce inflation, which recently hit its highest level in four decades.

7. Binance Joins Elon Musk in His Twitter Bid with $500m Equity Funding

Binance cryptocurrency exchange has joined Elon Musk’s Twitter Inc takeover bid with a $500 million equity contribution.

The contribution was highlighted as part of the related contributions from other venture capital firms as part of the updated Schedule 13D that was filed with the United States Securities and Exchange Commission (SEC).

8. Federal Election Donations in the U.S. can now be Made in Crypto.

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Federal Election coming up? Well now, you can donate to your fave candidate in crypto. Elections will still be an absolute sideshow however.

News updates May 06, 2022

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