Bitcoin Plunges Over 4%, Liquidation Wave Sweeps Crypto Market, US Election Could Shape Future Trajectory

Bitcoin Plunges Over 4%, Liquidation Wave Sweeps Crypto Market, US Election Could Shape Future Trajectory The cryptocurrency market has suffered a recent slump, with Bitcoin prices plummeting over 4%, triggering market panic and sparking a wave of liquidations. According to Coinglass data, over 140,000 accounts have been liquidated in the past 24 hours, with a total liquidation value of $391 million

Bitcoin Plunges Over 4%, Liquidation Wave Sweeps Crypto Market, US Election Could Shape Future Trajectory

The cryptocurrency market has suffered a recent slump, with Bitcoin prices plummeting over 4%, triggering market panic and sparking a wave of liquidations. According to Coinglass data, over 140,000 accounts have been liquidated in the past 24 hours, with a total liquidation value of $391 million.

Bitcoin Leads the Decline, Ethereum and Dogecoin Also Plunge

As of 13:00 Beijing time on October 26, Bitcoin has fallen by approximately 1%, Ethereum by about 1%, and Dogecoin by approximately 4%. CME Bitcoin futures closed 2.30% lower than the New York close on Thursday, with a cumulative decline of 3.09% for the week. Over the past seven natural days, spot Bitcoin has fallen by 1.87%. CME Ethereum futures DCR main contract experienced a cumulative decline of 6.95% this week.

US Government Tightens Crypto Regulation, Tether Investigation Raises Market Concern

Market analysts point to the US government's stricter regulation of cryptocurrencies as one of the contributing factors to the recent market decline. According to The Wall Street Journal, the US federal government is investigating cryptocurrency company Tether, suspecting potential violations of sanctions and anti-money laundering regulations. The investigation, led by the Manhattan US Attorney's Office, primarily focuses on whether Tether has been used to finance illegal activities such as drug trafficking, terrorism, hacking, or for money laundering.

The US Treasury Department is also considering imposing sanctions on Tether, as the company's cryptocurrency has been widely used by individuals and entities sanctioned by the US. Despite Tether CEO Paolo Ardoino's denial on social media that the company is under investigation, the news has sparked market concerns.

Tether, a global stablecoin giant, issues USDT (Tether), a stablecoin pegged to the US dollar, which is considered the world's first stablecoin. Regulators have been closely monitoring Tether for some time. As early as 2018, the US Department of Justice announced an investigation into whether cryptocurrency exchange Bitfinex and Tether were using USDT to inflate Bitcoin prices. In 2019, New York prosecutors accused Bitfinex of using Tether funds to help a payment processing company cover up its $850 million loss of customer and company funds. Ultimately, both parties reached a settlement in 2021, with Tether and Bitfinex agreeing to pay an $18.5 million fine and being prohibited from conducting business with residents of New York.

Bitcoin Mining Difficulty Hits All-Time High, Miner Revenue Significantly Down

In addition to regulatory risks, the increase in Bitcoin mining difficulty has also put immense pressure on miners. According to blockchain explorer Mempool, Bitcoin mining difficulty has increased by 3.94%, reaching a record high of 95.67T. The Block's data dashboard shows that the seven-day moving average of the Bitcoin network has also reached an all-time high of 723.6EH/s.

Since Bitcoin's halving in April, miner revenue has seen a significant decline. Under the previous block reward system, an average of 6.25 Bitcoins were produced every 10 minutes, equivalent to approximately 900 Bitcoins per day. After the halving event, this figure dropped to about 450 Bitcoins per day. Currently, the price of Bitcoin is almost at the same level as before the halving (around $60,000 to $65,000 per coin), but miner output has been halved. According to calculations, if miners sell Bitcoins at $60,000 per coin, the entire mining industry would lose nearly $10 billion in revenue in the year following the halving.

US Election Outcome Will Have a Far-Reaching Impact on the Crypto Industry

Industry consensus suggests that the outcome of the US election will have a profound impact on the cryptocurrency industry. The US election presents an environment where uncertainty and opportunity coexist. Market sentiment fluctuations and policy clarity will dominate the price movements of crypto assets in the medium to short term.

The Federal Reserve's interest rate policy and monetary easing measures are crucial topics in the election, and these policies are closely related to the crypto market. Crypto asset prices, particularly Bitcoin and Ethereum, tend to benefit from loose monetary policy as low interest rates and a loose credit environment attract more capital flows into risky assets.

Trump and Biden Have Divergent Approaches to Cryptocurrencies, Musk's Influence is Noteworthy

In the realm of virtual currency policy, Trump has been actively supportive of Bitcoin and cryptocurrency development, considering them a part of the "Trump trade." In his 2024 convention speech, he stated that he would maintain the US government's current Bitcoin holdings, transforming the US into a "cryptocurrency capital" and "Bitcoin superpower," arguing that the Biden administration's suppression of cryptocurrencies and Bitcoin was a mistake.

It is worth noting that Tesla CEO Elon Musk has firmly sided with Trump, campaigning for him, and his influence in the cryptocurrency market is undeniable. Musk's statements have repeatedly driven the rise and fall of cryptocurrencies like Bitcoin and Dogecoin.

Harris, on the other hand, has placed a greater emphasis on regulation, emphasizing support for regulatory frameworks for cryptocurrencies and other digital assets to protect investors and those who own these assets.

US Politicians' Attitudes Toward Cryptocurrencies are Shifting, Regulatory Clarity is Expected in the Future

In recent years, US politicians' attitudes toward cryptocurrencies have shifted from initial disregard to active discussions and even specific policy proposals, demonstrating the growing recognition of the importance of cryptocurrencies. Geoff Kendrick, head of digital asset research at Standard Chartered Bank, anticipates Bitcoin potentially reaching $73,800 before the US presidential election in November, representing a 12% increase from current levels.

Summary

The cryptocurrency market has suffered a recent slump, with Bitcoin plunging over 4%, triggering market panic and sparking a wave of liquidations. The US government's tightening of cryptocurrency regulation and investigation into Tether have raised market concerns. Bitcoin mining difficulty has reached an all-time high, significantly reducing miner revenue. Industry consensus suggests that the outcome of the US election will have a profound impact on the cryptocurrency industry, with Trump and Biden having divergent approaches toward cryptocurrencies, while Musk's influence is noteworthy. US politicians' attitudes toward cryptocurrencies are shifting, and regulatory clarity is expected in the future.