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Cryptocurrency

<$100B Crypto Crash: Causes & Market Impact by U.Today>

2024-12-10

In the dynamic world of cryptocurrencies, a significant phenomenon has come to the forefront. Bitcoin, the linchpin of the digital currency realm, has witnessed a precipitous decline that serves as a stark indicator of more widespread structural issues. These issues are largely intertwined with market-wide overleveraging.

Unraveling the Cryptocurrency Crisis and Its Aftermath

Bitcoin's Chart and the Critical Correction Phase

The chart of Bitcoin now clearly shows a critical correction phase. Despite its previous display of resilience, the psychological $100,000 mark has emerged as a formidable barrier. Whales, with their substantial holdings, have begun to take profits, causing the short-term bullish momentum to wane. This has placed additional strain on the asset. Currently, Bitcoin is trading below important Exponential Moving Averages (EMAs), increasing the likelihood of a further decline in the short term. 2: This downward trend is not just a blip but a reflection of the underlying market dynamics. The overleveraging that has permeated the cryptocurrency space is starting to take its toll. As more liquidations occur, especially those related to short positions, it becomes evident that the market's aggressive long positioning is facing significant resistance. The imbalance between buyers and sellers is intensifying volatility, setting off a chain reaction that affects not only Bitcoin but also other cryptocurrencies.

The Impact of Overleveraging on Bitcoin and Ethereum

The primary cause of this cryptocurrency collapse is overleveraging. According to the liquidation heatmap, a total of $172 million of the $1.58 billion in liquidations over the last 24 hours can be attributed to Bitcoin alone. These liquidations are mainly due to short positions, highlighting the market's struggle to sustain its aggressive long positions. Ethereum, too, has not been spared. In a similar manner, $229 million was lost in liquidations, indicating that the overall altcoin market is also under significant pressure. 2: The interconnectedness of these events is crucial to understand. As assets like XRP, Solana, and Dogecoin also experience downward pressure, it becomes clear that the entire cryptocurrency ecosystem is facing challenges. The current rally, which was fueled by overly optimistic market sentiment, is proving to be fragile. This mass liquidation cycle serves as a wake-up call, emphasizing the need for a healthy correction to reset overextended positions and create a more solid foundation for future expansion.

The Short-Term Outlook and Market Adjustments

In the short term, there will likely be more volatility as the market adjusts to these recent developments. While the overall outlook for cryptocurrencies remains favorable, the immediate future is uncertain. The market is in a state of flux, with Bitcoin and other cryptocurrencies grappling with the aftermath of overleveraging and liquidations. 2: However, it is important to view these fluctuations as a natural part of the market cycle. Cryptocurrencies have always been known for their volatility, and this period is no exception. As the market recalibrates, it presents opportunities for astute investors to identify undervalued assets and make informed decisions. The key is to remain vigilant and adapt to the changing market conditions.

Leaders in the cryptocurrency space have been in a state of unrest ever since recently uncovered documents revealed that the Biden administration instructed banks not to engage in cryptocurrency business. These documents seemingly confirm the suspicions of cryptocurrency tech founders being "debanked" under a program referred to colloquially as "Operation Chokepoint 2.0."

Silvergate Bank's Collapse and Regulatory Impact

Chris Lane, the former chief technical officer of Silvergate Bank, has accused federal regulators of playing a role in his bank's downfall. After the documents were made public on Friday, Lane wrote on social media that "Silvergate became what it was serving cryptocurrency clients. [Crypto was a] strategic vertical we started focusing on in 2013. Regulators came in sometime in Spring 2023 and severely limited the amount of U.S. dollar deposits we could hold for digital asset clients. There went our entire business model." He described the experience as equivalent to being "shot in the back."Cryptocurrency's future has been a topic of much discussion in light of these events. How will it change after Trump's election win? This is a question that remains unanswered but has sparked intense speculation.

The Role of Coinbase and FOIA Requests

Last week, Paul Grewal, the chief legal officer of Coinbase, one of the largest cryptocurrency exchange platforms, shared documents that he and his team obtained through Freedom of Information Act requests. These requests have been part of a protracted legal battle between the company and the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The documents showed that the Biden administration's FDIC sent numerous letters to banks, calling on them to "pause all crypto-asset related activity."This has raised concerns among cryptocurrency industry leaders who believe that law-abiding American businesses should be able to access banking services without government interference. Grewal pledged to continue fighting for transparency and obtaining unredacted copies of the documents.

Regulatory Stifling and Political Motives

Concerns over regulators stifling cryptocurrency's engagement with banks gained renewed attention during Thanksgiving week. Tech investor Marc Andreessen stated on Joe Rogan's podcast that more than 30 tech founders had been "debanked" for political reasons. He compared this to a similar Obama-era program known as "Operation Chokepoint," which aimed to inhibit high-risk industries like payday lenders and gun dealers.Bipartisan lawmakers are now pushing Biden to investigate Hamas' cryptocurrency financing. They believe that the incoming administration has the opportunity to reverse many of the poor crypto policy decisions, including politically motivated regulatory decisions like Operation Chokepoint 2.0.Fox News Digital reached out to the FDIC and SEC for comment but did not receive a response by press time. The cryptocurrency industry continues to face significant challenges as it navigates through these complex regulatory issues.

Last Friday night's Mountain West championship game on Fox set a remarkable record with 3.005 million viewers. This was a significant increase from the 1 million viewers of the previous season. Both Boise State and UNLV faced off in these games, and in 2024, the stakes were even higher as the winner earned a spot in the College Football Playoff and Broncos running back Ashton Jeanty became a finalist for the Heisman Trophy. The game reached its peak with 3.505 million viewers from 6-6:15 p.m. Pacific time, kicking off at 5 p.m. It emerged as the most-watched sporting event on that day across all networks, although it didn't claim the title of the most-watched game featuring a MW team in 2024.

Record-Breaking Viewership and Its Impact

The Mountain West championship game's record television viewership of 3.005 million viewers on Fox last Friday night was a game-changer. This significant increase from the previous season's 1 million viewers shows the growing popularity and excitement surrounding MW football. The peak viewership of 3.505 million during the 6-6:15 p.m. Pacific time slot with a 5 p.m. kickoff highlights the intense interest in this event. It not only became the most-watched sporting event of the day but also demonstrated the potential of MW football to attract a large audience. This record-breaking viewership has implications for the future of MW football, potentially leading to increased media attention and sponsorship opportunities.The fact that it was the most-watched sporting event of the day showcases the power of college football in general and the Mountain West conference in particular. It also indicates that fans are eager to watch high-quality football games, and the MW is delivering just that. This success can serve as a catalyst for further growth and development within the conference, attracting more talented players and improving the overall quality of play.

MW Football Games with Significant Viewership

Week 3's Colorado-Colorado State game attracted a massive 3.25 million viewers on CBS. This game demonstrated the appeal of inter-conference matchups and the ability of MW teams to compete at a high level. Week 15's Boise State-UNLV game on Fox also drew 3.01 million viewers, showing the ongoing rivalry between these two teams and the excitement it generates.Week 1's Fresno State-Michigan game on NBC had 2.56 million viewers, highlighting the potential for MW teams to draw large audiences against power conference opponents. Week 1's Colorado State-Texas game on ESPN with 1.84 million viewers and Week 11's Nevada-Boise State game on Fox with 1.53 million viewers further demonstrate the popularity of MW football. These games show that MW teams can attract significant viewership even when facing tough opponents.

Other Notable MW Football Games

Week 6's Air Force-Navy game on CBS with 1.28 million viewers and Week 1's UCLA-Hawaii game on CBS with 1.13 million viewers also had substantial viewership. Even games with lower-ranked opponents, such as Week 10's San Diego State-Boise State game on FS1 with 656,000 viewers and Week 13's Nevada-Air Force game on FS1 with 98,000 viewers, still managed to attract a decent number of viewers.Notably absent from the list is Boise State's game at Oregon on Peacock, where ratings were not released. This highlights the importance of having games on major networks to maximize viewership. Only one regular-season MW vs. MW game made it into the top 12, the Nevada-Boise State showdown on Fox in Week 11 with 1.53 million viewers.The highest-rated games were against power-conference teams in non-league play, with the Colorado-Colorado State game topping the list with 3.25 million viewers. This shows that MW teams can generate significant interest when facing off against established programs.In conclusion, the Mountain West championship game's record viewership and the popularity of MW football games throughout the season demonstrate the growing strength and appeal of the conference. These games are attracting a large audience and providing exciting entertainment for football fans. With continued growth and development, the MW is poised to make an even bigger impact in the world of college football.