Markets appear to have been rattled by COVID protests in China. BlockFi’s bankruptcy announcement hasn’t helped either.
Bitcoin, Ethereum, and the wider digital asset market dipped Monday along with global stocks as investors seemingly spooked by uncertainty around China due to anti-lockdown protests sold risk assets.
The largest digital asset was trading for $16,081 at the time of writing, according to CoinGecko—a 3% 24-hour drop.
Ethereum was experiencing a bigger sell-off. The second-largest cryptocurrency by market cap was trading for $1,158, down nearly 5% in the past day.
The large drop in price of the second-largest digital asset might be related to a whale moving 73,224 Ethereum, worth $85.7 million, to crypto exchange Binance, on-chain researcher Lookonchain said on Twitter Monday.
Lookonchain said in its tweet that Ethereum could experience selling pressure. The price of ETH immediately dipped 0.3% following the tweet with investors seemingly panicked by the news—and continued to drop hours later.
The whale who removed 84,131 $ETH ($101M) from Curve 3 days ago is transferring $ETH to #Binance.
He transferred a total of 73,224 $ETH ($85.7M) to #Binance, leaving 11,884 $ETH ($13.9M).
Watch out for selling pressure of $ETH!https://t.co/8KRdt8kopHhttps://t.co/voRXKZIhSF pic.twitter.com/7VYHFhlUQV
— Lookonchain (@lookonchain) November 28, 2022
But Matt Aaron, project lead at cielo.finance, which tracks on chain data, told Decrypt that despite the fact “we usually assume tokens sent to centralized exchanges are to sell,” the move by the ETH whale might be to stake Ethereum as “Binance offers ETH 2.0 staking.”
The crypto market also dipped following news that crypto lender BlockFi announced it was filing for bankruptcy. Decrypt first reported today that BlockFi, which lets users earn yield for depositing idle digital assets, would file for Chapter 11 bankruptcy protection.
A few hours later it made the official announcement, adding it would slash even more staff. The company had already cut its workforce by 20% in June.
BlockFi is the latest in a long line of crypto companies to get hit with contagion following the collapse of crypto exchange FTX.
And before the BlockFi news, the market was already rattled by uncertainty about China: the world’s second-largest economy has been hit by protests against the government’s zero Covid-19 policies, causing investors to shift risk assets; global stocks dropped when markets opened Monday.
Bitcoin typically has followed the U.S. stock market this year: when traders shift equities, the price of crypto falls too.
“The price of Bitcoin continues to be volatile in this uncertain environment of rising interest rates, increased geopolitical tensions, and amidst the blowups of various centralized exchanges and lenders in the broader cryptocurrency ecosystem,” lead analyst at Swan Bitcoin Sam Callahan told Decrypt.