On Saturday, Bitcoin (BTC) and the broader cryptocurrency market fell nearly 10 percent, with the price of the largest digital asset falling below $62,000 at one point before recovering to around $64,000.
Bitcoin isn’t the only one like this:According to CoinGecko, other major digital assets have seen similar declines over the past 24 hours, including ethereum (ETH), which is down 7% to just under $3,000, BNB (BNB) (down 9%) and solana (SOL) (down 12%). Trading volume has risen over the same period.
The decentralized finance (DeFi) sector has been hit particularly hard by the market disruption, with low prices forcing liquidation and increasing the likelihood that some agreements will suffer disruption.
One of the protocols under close scrutiny is Ethena, the popular ethereum project behind USDe, a “synthetic dollar” that mirrors the price of the U.S. dollar.Ethena has attracted more than $2 billion in deposits, but it uses a controversial methodology to maintain a “peg” between the U.S. dollar and the U.S. dollar. Ethena has attracted more than $2 billion in deposits, but it uses a controversial method to maintain the dollar’s “peg” to the U.S. dollar that has not been tested in such unfavorable market conditions.
The immediate cause of Saturday’s market decline is unclear, although Arthur Hayes, the former chief executive of BitMEX, wrote in a blog post last week that dollar liquidity will decline before U.S. taxes expire on April 15, which is next Monday. Lower liquidity will lead to lower prices, he said.
Meanwhile, Iran launched a drone and missile strike against Israel, which the Iranian government said was in retaliation for an airstrike on its consulate in Damascus, Syria. The Iranian government attributed the airstrike to Israel.
Crypto market prices began to recover after the X (formerly Twitter) account associated with Iran’s Permanent Mission to the United Nations said that “this matter can be considered closed”, although it warned that “if the Israeli regime makes another mistake”, “something much worse will happen”. There will be a “much more serious” attack.
