The weekend’s negative attitude has returned to the digital asset market as crypto stocks suffer hefty losses. Why are crypto stocks declining today? Thursday’s total crypto market cap decline might be ascribed to various factors.
According to figures released by the Labor Department on Thursday, U.S. consumer prices slowed in September compared to the previous month. However, the inflation rate was still higher than projected by economists. October has been rather harsh to digital assets, and today’s decline in crypto stocks has thrown the market into freefall.
Crypto stocks take a beating
Following the release of the Consumer Price Index (CPI) report on Thursday morning, the equity market and crypto stocks, in particular, are experiencing a hard time. According to the data, core inflation reached a four-decade high of 6.6%. Inflation was 8.2%, also above what economists had predicted.
It is probable that this will serve as the impetus for a further increase in interest rates, causing investor fear. Nevertheless, it should be noted that the rate was lower than the previous CPI figure of 8.30%.
According to the minutes from the September meeting of the rate-setting Federal Open Market Committee, released on Wednesday, central bankers expect rates to remain high unless prices decline significantly.
The crypto market cap has declined at the same rate as Bitcoin, 3.8%, over the past 24 hours. The BTC price first reached a low of $18,190 but has since rebounded to its current level of $18,430. The price of Bitcoin has declined by 3.85% since the start of the day.
All major U.S. stock market indexes have fallen by more than 2%, although the S&P 500 has reduced its loss to just 1% by mid-morning.
Other crypto stocks are declining, including crypto mining stocks. Among mining stocks, Marathon Digital (MARA) is trading down 7%, while Riot Blockchain (RIOT) and Core Scientific (CORZ) are trading down by a comparable amount.
U.K. miner Argo Blockchain (ARBK) continued to underperform the rest of the industry, falling 16.5% to add to its losses following last week’s plan to seek funds.
MicroStrategy (MSTR), the business that controls 130,000 BTC ($2.4 billion and decreasing), is down 6.7%. Coinbase (COIN) is down 11.5% as well.
Huobi Token surges amid the crash
As most crypto stocks decline, the Huobi token is on the rise. Over the previous four days, the price of H.T. has surged by 76%, exhibiting a negative correlation with the rest of the cryptocurrency market. The price of Huobi Tokens reached a high of $7.67.
Since the beginning of this week, H.T.’s price has increased more than 80%, marking its highest weekly performance since February 2021. Most of H.T.’s intraday gains coincide with the crypto exchange Huobi Global announcing the launch of spot trading for Starfish Finance (SEAN) on its platform.
H.T.’s excellent weekly gains were also attributable to About Capital Management. This Hong Kong-based investment group announced the acquisition of Huobi Global, one of the largest cryptocurrency exchanges, on October 8.
Justin Sun, the creator of the Tron blockchain project and presumably the primary backer of About Capital, announced on October 10 that they would enable H.T. to promote Huobi Global’s brand and business operations.
SEC criticized for its approach towards crypto
Things may be murky for crypto investors at the moment, but crucial analysis is emerging. Financial watchdogs in the United States have been condemned for overplaying their hand. As crypto stocks prices fall, U.S. Senator John Hickenlooper (D-Colorado) has become one of the first Democratic senators to publicly criticize the approach to cryptocurrencies taken by SEC chief Gary Gensler (SEC).
According to Hickenlooper, the lack of a coherent regulatory framework leads to “uneven enforcement” and impedes a clear understanding of investor protection.
Political classes have criticized Gensler and the SEC’s attitude to crypto in the past, but often from the opposite side of the aisle. Sen. Pat Toomey (R-Pa.), for instance, criticized the regulator for the absence of regulatory action that could have spared the worst repercussions of the failure of many crypto companies, including Celsius Network.
Michael Barr, vice chair of supervision at the Federal Reserve, stated at D.C. Fintech Week that the interdependence between crypto firms during the last year’s market downturn underlined the possible hazards for banking institutions that become involved with them.
In addition to issuing supervisory guidance outlining the steps, Fed-supervised banks should take before engaging with crypto assets in August. Additionally, Barr stated that the Fed was collaborating with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to help make these institutions aware of the risks and the necessary precautionary measures.
The current state of the crypto market has investors perplexed. Will the market collapse entirely if the United States continues to combat inflation? This is a difficult situation to be in in the present day. The persistent failure of crypto stocks is not an encouraging sign for investors in digital assets.
Source: https://www.cryptopolitan.com/crypto-stocks-plunge-due-to-the-cpi-report/