The price of Bitcoin today is doing a sharp decline as investors take a more cautious stance amid the decline of global equity markets.
Although Bitcoin is often associated as a ‘safe haven’ asset, the reality is that the price of bitcoin tends to decline amid the fall in the price of higher risk assets. Usually a fall in stock prices will push the price of Bitcoin down.
So far the Bitcoin price has lost 10% and is trading at $ 42,634 based on Coin Metrics. The same fate befell other crypto assets. Ethereum on the other hand has fallen 12% to $ 2,985.95.
It should be noted that the global equity market is experiencing a downturn as investors are worried about the risk impact due to the turmoil in the Chinese real estate market related to developer Evergrande. At the same time investors are also focusing on The Fed for indications on monetary stimulus plans. The central bank will begin a two -day meeting on Tuesday.
The decline in crypto prices was also driven by growing uncertainty about stablecoin rules. The financial authority in its latest report described stablecoin as a risky one so that heavier regulations could be imposed.
Currently the responsible body is compiling a report on stablecoin and the Fed is likely to release a report on the central bank’s digital currency this month that could touch on stablecoin risk.
