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Many people are selling their digital things because of a new U.S. bill. This bill doesn’t include usual stuff like ‘digital assets,’ and some folks think it’s bad news for DeFi.
People selling their bitcoin (BTC) to make profits caused the overall market to drop. Tokens from big blockchains like Solana’s SOL dropped by about 8% in the last 24 hours, as shown by data.
On Friday, the price of Bitcoin went below $30,000 in Europe. Regular financial markets didn’t change much. Ether (ETH) lost over 3% of its value. Other big cryptocurrencies like XRP dropped around 6%, while Cardano’s ADA and Avalanche’s AVAX fell by 4% in the last 24 hours.
“Stellar’s XLM went down by 6.6% because traders sold it to make profits after it increased 10% in the last week. Chainlink’s LINK didn’t change much after going up 15% on Thursday because of its new CCIP protocol introduced earlier this week.”
Many people may be selling their cryptocurrency because U.S. House Republicans introduced a new bill. The bill’s purpose is to set up rules to protect investors who use cryptocurrency.
According to analysts, the new bill doesn’t include certain typical things like stocks, bonds, and similar investments in the ‘digital assets’ category.
Gabriel Shapiro, a legal expert at a crypto fund called Delphi Digital, tweeted that if regulators say a token is like a ‘transferable share’ or ‘a profit interest,’ it will be fine, and cryptocurrencies like XRP will be safe. However, he also warned that regulators could still cause issues for decentralized finance (DeFi) because they will have more control over it.
The CoinDesk Market Index (CMI), a broad-based index designed to measure the market capitalization-weighted crypto market performance, fell 1.7%.
Meanwhile, the price drop caused over $66 million in liquidations in the past 24 hours, data from the analytics tool Coinglass shows. Slightly over 70% of these liquidations were on longs positions, or from traders betting on higher prices.
Liquidations occur when traders borrow funds from exchanges to bet on crypto prices using a relatively smaller initial capital, one that is forfeited when prices reach a predetermined liquidation level.
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