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aversion to risk, rebound of the inflation, change of cycle in the types of interest, holes of cyber security and the regulatory crackdown in countries like the US, China or Russia they are behind the biggest crisis of confidence in the world of crypto assets since the Covid-19 pandemic broke out, even surpassing the crisis that occurred between April and June 2021.

The massive loss of value of the ‘tokens’ exceeds 1.3 billion euros from the highs reached last November, half of its total capitalization. At the head of that figure are Bitcoin and Ether, the two largest cryptocurrencies with a combined weight of 66% compared to 33% for the other 17,000 tokens, according to data from Coinmarketcap.

At the head of that figure are Bitcoin and Ether, the two largest cryptocurrencies with a combined weight of 66% of the total market capitalization compared to 33% for the other 17,000 tokens, according to data collected by Coinmarketcap. The price of Bitcoin was around 32,000 euros ($36,100) on Monday night while Ether was trading at 2,100 euros ($2,400), which represents falls of the order of 50% from its highs in November and January of this year.

“The risk aversion mood also affects unprofitable technology and crypto system, as it is intertwined with the US tech theme,” Julius Baer analysts note in a market commentary. Electronic currencies, based on blockchain -chain of blocks-, have been hit in recent months by regulatory offensives in various countries, both from the point of view of taxation and their very existence.

By the end of September, China Declared Virtually Any Cryptocurrency Activity Illegal both at the transactional level such as holding and mining, validation process of operations and token issuance. Asia’s largest economy moved to a belligerent position towards decentralized currencies when it launched its digital yuan.

Russia has joined this trend of prohibiting its use by raising the flag of defense of financial stability, that the case of the country’s financial system is already real due to the weakness of the ruble and the conversion of savings to cryptocurrencies. “The anonymity offered by crypto platforms allows their use in illicit activities such as money laundering, the financing of terrorism, extortion, bribery and drug trafficking,” says a document published by the central bank last week.

The price of cryptos has been weighed down in recent months by tensions in Kazakhstan, a country that concentrates 18% of the mining, according to Europa Press, after the displacement of the ‘farms’ from China and Russia to other energy-rich countries and at a good price. The Kazakh government ordered the blocking of the internet connection to contain the wave of protests in the streets due to the escalation in the prices of natural gas and energy in the country. The ‘blackout’ affected some of the major blockchain networks in other parts of the world.

But the attention of all investors, both those who have cryptos and those who are invested in stocks or bonds, are back in the US. The plans for the launch of an electronic dollar by the Federal Reserve (Fed) and the Treasury seem to be on the right track, after comments from some senior central bank officials who urged to speed up legislative coverage both in Congress and Senate. It is also expected that the governor ‘in chief’, Jerome Powell, provide updates on this project on Wednesday, at the end of the meeting on monetary policy, which will set the course for currencies backed by central banks.


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