Today is one of those days when crypto investors panic as the market moves as major cryptocurrencies, including Bitcoin, crash. We tell you all the details!
A bad day for the crypto market
Today the crypto market has taken a gigantic beating with the total market capitalization falling by more than 10% in the last 24 hours, according to data from CoinGecko.
And, in case 10% doesn’t ring a bell for you, this is a loss of more than $ 200 billion for the entire crypto market.
Among the top 10 currencies, Dogecoin (-11%), Bitcoin Cash (-16%), and Binance Coin (-13%) have been hit the hardest. However, Bitcoin and Ethereum have not been saved since they have reported a reduction of 9% and 8%, respectively.
But what happened? What triggered the panic in the crypto market?
Binance is under investigation
Yes, you read it right. One of the most relevant crypto exchanges in the industry is being investigated by both the United States Department of Justice and the Internal Revenue Service. This in an apparent effort to hamper illegal business activity by users in the United States.
According to Bloomberg, the two US agencies are investigating Binance as part of an investigation into US residents using cryptocurrencies for illegal transactions.
For his part, Changpeng Zhao, CEO of Binance, assured that the crypto exchange is collaborating with regulators in order to fight against the bad guys.
The “news” title is bad. Article itself isn’t so bad actually (but who reads). It described how @binance collaborated with law enforcement agencies to fight bad players, but somehow made it look like a bad thing… 🤔 Anyways. Back to work.
– CZ 🔶 Binance (@cz_binance) May 13, 2021
We previously reported from CryptoTrend that the crypto exchange was being investigated by the CFTC.
Elon Musk kicks crypto leader
Elon Musk, CEO of Tesla, has earned his reputation in the crypto market for exerting pressure on cryptocurrency valuations. In such a case, Musk said yesterday on Twitter that Tesla will no longer accept Bitcoin as payment.
Why? Well, Musk argued about energy concerns in Bitcoin. “We are concerned about the increasing use of fossil fuels for mining and Bitcoin transactions … especially coal, which has the worst emissions of any fuel,” he explained on Twitter.
Faced with the news, the crypto community reacted and, the combination of events, caused the price of the leading crypto to collapse below USD 50,000.
One of the most repeated claims by the crypto community was in relation to possible hypocrisy on Musk’s part. As we reported in CryptoTrend, Musk in the past showed his approval in the face of an investigation by Square that concluded that Bitcoin could, in fact, promote the use of renewable energy.
Grayscale Bitcoin Trust is not saved from crypto panic
The Grayscale Bitcoin Trust (GBTC) premium fell to -20.48% on Wednesday, May 12, according to cryptocurrency data tracker YCharts.
As we previously reported, historically, GBTC has traded at a significant premium relative to the price of Bitcoin. But since late February, the fund’s shares have plummeted and have been trading at a discount ever since.
In a few lines …
BlackRock’s Rick Rieder rejected Tesla’s decision on the leading crypto, but believes Bitcoin will face some challenges. MicroStrategy CEO Michael Saylor added another 271 Bitcoin to its strategic reserves.
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