After days of continuous losses in the crypto market, another crash appears to put the market further into the dark with US stablecoins moving up the leaderboard.
Briefing
From yesterday's briefing, a lot of new activity has occurred to bring surprising changes that would break expectations from many. Some of the major changes will be gone through, but of course, there are many upon many trends out there that each has their own story. There are currently 7458 coins listed in CoinGecko, and 10009 coins in CoinMarketCap, so there is obviously great action in the crypto market, even more considering the enormous crash upon a crash that is happening.
From yesterday, the top 10 has experienced a great swipe, going against expectations of a recovery for the top cryptocurrencies to return to their original position. However, it is important to note that the crashes have reduced for the general scope, going from 20% and above to now between 10%-20%. This suggests that the crash is slowing, but when the crash will stop and recovery begins is a mystery.
The most surprising of them all has the be Binance Coin (BNB). It is now in 6th place, which completely goes beyond the expectations from the solid position that it has held for months in 3rd place. And it is no small gap, about $20 billion between itself and 3rd place, now taken by Tether (USDT), the most popular US stablecoin in the crypto market. On top of BNB is Cardano (ADA) at approximately $41 billion and DOGE at approximately $41 billion as well, though a bit under than over with ADA. The gap, in this case, is still considerable, BNB needing to move over $500 million to take 4th place and begin challenging USDT. Surprisingly, BNB has experienced such a fall from the popular BSC (Binance Smart Chain) that operates it, and it is hoped that it will recover to its original position in due time.
USD Coin (USDC) has also made itself further up the leaderboard, moving from 9th yesterday to 8th, overtaking Polkadot (DOT) to have a challenge with XRP (XRP) that is still sitting at 7th place.
Between BNB and XRP, it seems that XRP can potentially overtake BNB as well, the gap between the two challengers at about $3 billion. This is possible from the business nature XRP brings since it targeted towards business transactions, thus having the potential for business to pick XRP over BNB.
When going into the tops for 24h volume, US stablecoins make a strong presence. USDT still is sticking at first for the most 24h volume at over $116 billion, but what is interesting is the place which Binance USD (BUSD) is taking. BUSD is at 5th place with 24h volume, previously much further down the leaderboard, indicating higher activity with BUSD. USDC is also in the leaderboard, sitting at the bottom of the snapshot. Other interesting cryptocurrencies are also within the 24h volume scope, which can be viewed below.
What is important to note is that this crash has occurred a few years ago in 2017-18 with Bitcoin (BTC), thus applying with other cryptocurrencies as well since they all relate with BTC. The current trend could be seen as a replica of the crash in 2017-18, now in the middle of the crash period. From this assumption, it can be assumed that the crash will not end anytime soon and will not recover anytime soon, possibly taking months, even years, before the light appears from the darkness. The maximum trend of BTC from CoinGecko is shown below, illustrating the replica mentioned earlier.
Reasons For The Continuous Market Crash
Many reasons are out there explaining the continuous market crash, just like there are many cryptocurrencies stories for this crash. The same case will be gone like the briefing previously, some of the major cases mentioned and explained.
The biggest reason for the current market crash is most likely the crackdown on crypto and the banning of BTC mining in China. China takes a huge part of the crypto industry, and with China gone, so does its huge part of the crypto industry. This is what is happening now. The huge part of China in the crypto industry has been taken away, thus driving the market cap down that brings the price down.
Action on crypto not only includes China, but other countries also looking at crypto action. Such countries include Australia, India and Iran. In Iran's case, they have recently pledged to shut down licensed crypto miners in peak hours of power consumption. This is for Iran to maintain a reliable electrical supply for others, crypto mining taking a high quantity of electricity. However, the measure states to deal with licensed facilities, not illegal crypto miners that burn much more energy, which the government does admit to. To put it in perspective, licensed crypto miners use 300 MW (Mega Watts), while illegal farms burn 2000 MW.
Since there is a great crash with no recovery visible, this brings on FUD (Fear Uncertainty Doubt). Although it could be expected that the crypto market will eventually recover, many people may not see this. They become impatient, fearful to lose all their portfolio, and so pull out to cash in with what they can get. This gives a domino effect. People sell out because there is a market crash, and that causes the market to crash even further, and so even more people sell out, and so the cycle goes on. However, it is important to note that eventually, the people that buy from the cheap price they see will outweigh the panicked sellers, thus giving a recovery that potentially would be quick.
BNB has been hit hard in the last day, losing its solid 3rd place to move down to 6th and challenging cryptocurrencies below that it has not done for months. BNB's reason for its crash and huge deduction in the market cap may lie in the widespread crash of FUD and authoritarian action, but it may also be from something else. This is the recent onset of series of attacks on BSC projects, particularly in terms of Defis that have become popular within the blockchain. PancakeBunny (BUNNY) had experienced a flash loan attack to dump over 80%, and today Bogged Finance (BOG), also falling about 80% due to a flash loan attack. This series of heavy attacks on popular BSC projects pull-down BNB, thus contributing to its dump in market cap to fall into 6th place. People do not want to risk losing their money to what BSC projects look like now as dangerous, thus pulling out before anything bad happens to bring BNB down.
Further Reading
Bitcoin.com - Iran to Shut Down Licensed Crypto Miners in Peak Hours of Power Consumption - https://news.bitcoin.com/iran-to-shut-down-licensed-crypto-miners-in-peak-hours-of-power-consumption/
The Block - China's bitcoin crackdown comment sparks USDT sell-off on OTC desks - https://www.theblockcrypto.com/post/105708/china-bitcoin-crackdown-usdt-otc?utm_source=rss&utm_medium=rss
CoinGape - Binance Smart Chain-based Bogged Finance Falls Victim to Flash Loan Attack, BOG Tanks 98% - https://coingape.com/goldman-sachs-ethereum-eth-might-overtake-bitcoin-btc-as-a-store-of-value/
CryptoDaily - DeFi100 Claims Website Hack After Allegations Of Exit Scam - https://cryptodaily.co.uk/2021/05/defi100-scam-update
