update 17 November 2021

Cryptos Drop With Bitcoin as After Threats From China – Twitter Rules Out Holding Bitcoin On Balance Sheet

Crypto markets are in the red after a 7-week rally. Major cryptos dropped with Bitcoin on Tuesday, down from record highs just a week ago.

Bitcoin was down 7.3% in the last 24 hours. At one point, the largest crypto briefly dipped below $60,000, going as low as $58,702. It later rebounded, trading at around $60,550.

At the same time, the largest smart contract crypto Ethereum dropped 9.2% to $4,287. Binance Coin dropped to $583, 9% down in the same period. Solana fell by 8.6% to $221, the lowest level since February.

Cardano and Ripple dropped 7.78% and 8.25%, down to $1.90 and $1.10, respectively.

Just one week ago, major cryptocurrencies surged to all-time highs on improvements in their blockchains. Bitcoin reached an all-time high of $68,990, as did Ethereum, at $4,865.

Both traders and analysts speculated that $100,000 Bitcoin and $5,000 Ethereum could be coming soon.

China ‘Bans’ Crypto Again

The reason behind the drop is not exactly clear. One potential catalyst could be the latest Chinese announcement on crypto. A Chinese regulator stated that it would continue to crack down on mining in the country. They called mining “extremely harmful” due to its high demand for energy and effects on carbon emissions.  

Chinese attacks on crypto are nothing new. Earlier this year, China has brought the foot down on crypto miners, causing most to flee the country. The move coincided with the introduction of the digital yuan and Chinese plans to cut carbon emissions.

However, the markets are already aware of how China feels about crypto. China began targeting crypto in 2013 by introducing rules that prohibited banks from handling crypto transactions.

That is why most seasoned traders don’t take Chinese threats that seriously and expect the markets to bounce back. Moreover, most experienced traders expect a degree of volatility in crypto markets.

Twitter CFO Rules Out Crypto Investment

Another catalyst could be the news that Twitter is not considering holding crypto.

Ned Segal, CFO of Twitter, said that the company would not invest in crypto just yet. The move “doesn’t make sense right now,” as the company prefers to hold less volatile assets.

“We have to change our investment policy and choose to own assets that are more volatile,” Segal elaborated. Twitter held $3.47 billion in cash and $3.94 billion in other liquid assets in September.

There was some reason to expect that Twitter might buy crypto. In February, Segal stated that the company is considering adding crypto to its balance sheet.

However, the most recent statement by Twitter’s CFO does not mean that Twitter is rejecting crypto. The company has recently assembled a Twitter Crypto team to explore integrating cryptos on the platform. The team will look into crypto payments, NFT tooling, and decentralized social media.

Even more significantly, Twitter’s CEO, Jack Dorsey, is passionate about crypto, especially Bitcoin. Furthermore, his company Square holds purchased some $50 million worth of BTC in October 2020. He also stated that Bitcoin will play a “big part” in Twitter’s future.

‘Healthy Pullback’

Whatever the catalyst may be, most traders are not concerned with the long-term outlook for crypto. Vijay Ayyar, the CEO of crypto exchange Luno called the move “normal” and “healthy.”

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“I think we’re seeing a healthy pullback after a 7-week rally from 40K to 69K, which is normal in an upward trend,” he said.