Bitcoin shed a fifth of its value on Saturday as a combination of profit-taking and macro-economic concerns triggered nearly a billion dollars worth of selling across cryptocurrencies.
As the cryptocurrency market crashed by 16.5 percent on Saturday, a Bitcoin trader lost at least USD $2.5 billion in a single day. The mystery trader, who owns 288,000 Bitcoin, suffered huge losses in the early hours of Saturday morning.
According to BitInofCharts, the trader had $16.29 billion worth of Bitcoin on Friday. On Saturday morning, the crypto market plummeted, dropping his crypto-asset worth to $15.45 billion and then to $13.81 billion by the evening. The fall ultimately wiped out $2.48 billion in one day.
Bitcoin shed a fifth of its value on Saturday, and some analysts called the market crash â€œprofit-bookingâ€ time, as the cryptocurrency market hit its recent high. Justin dâ€™Anethan, Hong Kong-based head of exchange sales at cryptocurrency exchange EQONEX, told Reuters that he had been watching the increase in leverage ratios across the cryptocurrency markets as well as how large holders had been moving their coins from wallets to exchanges. The latter is usually a sign of intent to sell.
Based on cryptocurrency data platform Coingecko, the market capitalisation of the 11,392 coins it tracks dropped nearly 15 per cent to $2.34 trillion. That value had briefly crossed $3 trillion last month when Bitcoin hit a record $69,000. The plunge follows a volatile week for financial markets.
Global equities and benchmark US bond yields tumbled on Friday after data showed US job growth slowed in November and the Omicron variant of the coronavirus kept investors on edge.
The selloff also comes ahead of testimony by executives from eight major cryptocurrency firms, including Coinbase Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried, before the US House Financial Services Committee on December 8.
The hearing marks the first time major players in the crypto markets will testify before US lawmakers, as policymakers grapple with the implications of cryptocurrencies and how to best regulate them.
Meanwhile, India is yet to table the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 for introduction in Parliamentâ€™s Winter Session, which seeks to prohibit all â€œprivate cryptocurrenciesâ€ in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.