Just a day after U.S. President Joe Biden's hallmark executive order on digital assets generated market excitement, Bitcoin and other digital coins slid considerably due to a declining broader equity market.
Bitcoin price has shed 5.84% on Thursday to $39,350.87, according to Coin Metrics real-time figures.
The world's leading cryptocurrency soared to around $42,577 on Wednesday after beginning the day trading at $38,744, CNBC reported.
Other cryptocurrencies are likewise trading lower on Thursday, as per Coin Metrics. Ethereum is down 3.99% at $2,598.90, while Cardano, Polkadot, and Dogecoin dropped considerably in the last 24 hours. Cardano is down 4.72% to $0.803, Polkadot falling 4.64% to $16.94, and the meme-based asset Dogecoin stumbling at 3.40% to $0.116. XRP also plummeted 3.94% to $0.737.
Experts Detail Factors Behind Fall of Crypto Prices
Prime Trust chief product officer Sara Xi said the downtrend is a result of "multiple factors." She said that with macro-level events causing the decline in broader equity markets, these have likewise driven crypto markets down. A lot of people, she said, view crypto as an "investment vehicle."
But Xi emphasized that crypto is "more than an investment vehicle". Crypto, she added, is a "store of value" and a "currency" that counteract and bring prices up. The current macro-level events, such as the Russian invasion of Ukraine and the rising oil prices, are "overpowering everything."
The rise in crypto prices on Wednesday was a result of mounting optimism from Biden's executive order. This order zeroes in on six areas: financial inclusion, responsible innovation, consumer protection, illegal activities, financial stability, and U.S. industry competitiveness.
Biden's move was met with praise among top cryptocurrency industry players. Cryptocurrency exchange Gemini co-founder Cameron Winklevoss considers the E.O. as a "watershed moment."
1/ @potus’s executive order on crypto is a watershed moment. It paves the way for thoughtful national crypto regulation that will allow builders to build onshore and ensure that the US remains a leader in crypto — creating greater independence, choice, and opportunity for all.
— Cameron Winklevoss (@cameron) March 9, 2022
However, not everyone was impressed.
Biden E.O. Seen as a "Defensive" Measure
Cryptocurrency investment platform My Digital Money co-founder Guy Gotslak described the Biden E.O. as a "defensive" measure. The main objective of the order, he said, was merely to safeguard U.S. global financial dominance, assure U.S. regulations or sanctions are not evaded using digital assets, guarantee crypto investors and users are legally protected, and that the crypto industry is regulated.
Gotslak said that while the E.O. seeks to protect investors, the Biden directive does not mandate the government to undertake proactive steps to "nurture the growth of technology."
As the order was considered as positive, it was not the main driver of the crypto price spike, given that Bitcoin had soared on Wednesday yet plummeted on Thursday.
Crypto exchange Luno vice president of corporate development Vijay Ayyar said the Biden E.O. was "overall more positive or neutral." But even if the general crypto market reacted positively to the order, the "momentum wasn't strong enough to surpass resistance" at $42,000, Ayyar added.
Bitcoin, Ayyar further said, is "broadly range bound" and not able to make strong movements on either side, "coupled with ongoing uncertainty about Ukraine."
