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Cryptocurrency

Bloody Sunday: Over 1 million investors liquidated, altcoins crash by 20%

For the day, about 1,018,638 investors had their account worth about $10 billion liquidated.

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A significant number of investors in the crypto market have had their accounts liquidated amid the sudden drop seen in a number of altcoin assets.

For the day, about 1,018,638 investors had their account worth about $10 billion liquidated. The largest single liquidation order happened on Binance-BTC valued at $68.73 million.

The flagship altcoin is under high selling pressure with Ethereum trading at $1,952 at the time of writing this report, down 21.46% for the day. It is the biggest daily drop since March 12, 2020.

Such a fall pushed Ethereum’s market value to $247.15 billion, or 12.16% of the total cryptocurrency market value. At its highest, Ethereum’s market value was close to $300 billion.

READ: Red Sunday: Crypto market drops $70 billion in value as Bitcoin, Ethereum, Litcoin tumble

On the altcoins side, the sudden crash at the time of writing this report could not be fully assessed, but market sentiments point to rumours that the U.S. Treasury is planning to charge several financial institutions for money laundering using crypto.

Top cryptos such as XRP lost as much as 21.17%, Polkadot and Litecoin were down by 20%, bitcoin cash down 20% for the day, while dogecoin has lost about 15% in value.

Many weeks ago, leading United Kingdom financial regulator, the Financial Conduct Authority, issued a piece of stern advice on crypto investments. The statement highlighted the risks associated with investing in Bitcoin and other crypto assets and warned the public that there were high chances that all their funds could be lost.

READ: Bitcoin’s market value now $468 billion, bigger than GDP of Africa’s largest economy

“The FCA is aware that some firms are offering investments in crypto assets or lending or investments linked to crypto assets, that promise high returns.

“Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors’ money. If consumers invest in these types of products, they should be prepared to lose all their money,” said the FCA.

That said, a significant number of crypto investors appear to be shrugging off the huge fall as another typical bump on the crypto path, and one which, no doubt, will likely see crypto trading volume return as crypto investors look to buy what many are viewing as a bargain, to buy into what is still very much a bullish run.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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    Cryptocurrency

    Troubling signs on crypto market, SEC tags many crypto assets as Securities

    These further suggest the head of the financial watchdog could tighten its grip on the crypto market.

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    Dark clouds hover above the cryptoverse as the leader of the world’s most powerful investments regulatory agency affirmed most crypto assets as securities.

    Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC) in his most recent appearance on CNBC’s Squawk Box, opined that “many” crypto-assets were securities, meaning many of these assets required regulatory oversights and exchanges trading such crypto assets require at least a form of SEC regulation.

    In his words:

    “The extent that something is a security, the SEC has a lot of authority. And a lot of crypto tokens—I won’t call them cryptocurrencies for this moment—are indeed securities.”

    What you must know

    An asset is considered a financial security asset if it is a tradable financial asset and thus has monetary value.

    What Gensler said suggests that the financial assets watchdog could tighten its grip on the crypto market. Recall that SEC is already battling with Ripple and calling XRP a security asset.

    However, Gary Gensler described the flagship crypto asset as a store of value but with a very volatile characteristic and not a security.

    It’s important to understand why the regulator doesn’t classify Bitcoin as a security. It is based on the fact that its existence began through mining as an incentive in validating a distributed platform. There are no pre-mined coins, no initial token offering, and no kind of business entity governing it.

    A few months ago, Nigeria’s Securities and Exchange Commission released guidelines referring to cryptoassets as securities, except proven otherwise.

    • The position of the Commission is that virtual crypto assets are securities, unless proven otherwise.
    • Thus, the burden of proving that the crypto assets proposed to be offered are not securities and therefore not under the jurisdiction of the SEC, is placed on the issuer or sponsor of the said assets.
    • Issuers or sponsors are expected to satisfy the burden of proving that the virtual assets do not constitute securities by making an initial assessment filing.
    • However, where the finding of the Commission is that the virtual assets are indeed securities (not structured to be exclusively offered through crowdfunding portals or other exempt methods), then the issuer or sponsor must register the digital assets.

    That being said, recent price actions reveal the bullish trend in the crypto market is still very much in play despite regulatory fears surrounding the crypto market as its market value now stands at $2.42 trillion, posting a 2.47% increase over the last day.

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    Cryptocurrency

    Coin of the week: Ever heard of EOS?

    EOS is currently trading $11.33 with 936 million coins in circulation and a total supply of 1.02 billion.

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    EOS was created and designed to allow developers to build decentralized apps (DApps). DApps are any computer applications whose operation is maintained by a distributed network of computer nodes, as opposed to a single server.

    The EOS platform was developed by the company Block.one, to make it as straightforward as possible for programmers to embrace blockchain technology and ensure that the network is easier to use than rivals. It also aims to deliver greater levels of scalability than other blockchains which can only do a dozen transactions per second.

    EOS was created by Daniel Larimer and Brendan Blumer. Brenden Blumer is an entrepreneur, who was one of the co-founders of Okay.com, a digitally focused real estate agency in Hong Kong while Daniel Larimer is a software programmer who has also started a series of crypto ventures such as the crypto trading platform BitShares and the Steem blockchain. They are both members of Block.one’s executive team, with Brendan Blumer as CEO and Daniel Larimer as CTO.

    Why Invest in EOS?

    Block.one stated that EOS can accommodate the demands of thousands of DApps, even if they were being used by a high number of people. Parallel execution, as well as a modular approach, are said to drive this efficiency.

    EOS represents a truly democratic system that takes into account the will of the people, in this case, its token holders, as they can vote for block producers as well as other matters such as protocol upgrades.

    Network Security

    EOS, like many other coins, uses a delegated proof-of-stake consensus mechanism. This concept was conceived by Daniel Larimer and aims to solve some of the flaws that are seen in conventional PoW (Proof-of-Work) and PoS (Proof-of-Stake) systems.

    As stated earlier, those who own EOS tokens can vote for representatives who will be responsible for validating its transactions. One of the advantages is that it helps eliminate consolidation, where smaller miners are pushed out by those who have greater levels of computing power and resources.

    Price Analysis

    EOS is currently trading $11.33 with 936 million coins in circulation and a total supply of 1.02 billion. EOS has gained approximately 466% return comparing its 52 weeks low to its current price today. It is currently down 49.71% from its all-time high of $22.89 that was last traded on the 29th of April, 2018.

    Recently, after the Biden administration’s proposed tax hike, the coin dropped from its previous 2021 peek of $8.80 to a 0.236 Fibonacci retracement zone of $4.74, creating a new higher-low that indicates a bull market. No surprise that the market broke its previous 2021 high to create a new high of $13.18 on the 6th of May, 2021, following news of the coin proposing to increase its staking rewards. It is believed that this running will lead the coin to break its previous all-time high of 2018.

    Although it is not advisable to buy coins at peak prices, recent news as earlier mentioned, suggests that an increase in demand for the coin is imminent. Block.one mentioned that the protocol needs to increase the rate of inflation from its current pace of 1% to a rate between 1.2% and 3.8% intended to increase financial incentives for voters and block producers. While token holders still need to settle on what exact size the inflation rate will increase to, the possibility of higher yields for community participation has brought demand to the coin.

    A second major development for the protocol is the EOS PowerUp model, which intends to allow users to pay a fee to power up their account for 24-hours to transact on the network as opposed to paying a transaction fee for every transaction. Block.one mentions that the PowerUP model offers EOS token holders another way to earn a yield by depositing unused EOS tokens to receive a percentage of all the ‘power-up’ fees that are generated by the network. This has become an increasingly attractive option as investors are searching for ways to avoid the high gas fees (transaction fees) and network congestion on the Ethereum (ETH) network.

    With the overall cryptocurrency market bullish and projects like Litecoin (LTC) and Ethereum Classic (ETC) reaching new highs, EOS is a blockchain project that could benefit investors as the cryptocurrency bull market continues.

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