Bitcoin and Ether dropped in Thursday morning trading in Asia along with the rest of the top 10 non-stablecoin cryptocurrencies. Solana led the losers. The declines come amid concern bank failures in the U.S. in recent weeks may point to broader problems in the financial sector after months of interest rate hikes in the U.S. and Europe. Shares in Credit Suisse Group AG fell sharply on Wednesday, unnerving U.S. equity markets. Regulation challenges remain a background concern for crypto-related businesses.

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Fast facts

  • Bitcoin fell 1.79% in the past 24 hours to US$24,345 at 09:00 a.m. in Hong Kong, according to CoinMarketCap data, but held onto a seven-day gain of 11.99% after a strong run up earlier in the week.
  • Ether fell 3.25% to US$1,650. It’s up 7.41% for the past seven days.
  • Solana led the losers in the top 10 non-stablecoin cryptocurrencies, falling 8.71% to US$19.11. Formfunction, an NFT marketplace on the Solana blockchain, announced on Wednesday it would wind down operations by March 29, saying only that it can’t continue to operate.
  • Regulation confusion and pressure are other factors in the pull back in cryptocurrency prices. U.S.-based digital asset platform Anchorage Digital said on Tuesday it would cut around 20% of its staff to restructure amid regulation uncertainty. The Binance exchange this week said it will stop handling pound sterling transactions for U.K. customers citing pressure from regulators, while the U.S. Department of Justice is trying to block the US$1 billion sale of bankrupt crypto lender Voyager to Binance. Add to this mix the collapse of crypto-friendly banks this month.
  • The total crypto market capitalization fell 2.48% in the past 24 hours to US$1.06 trillion. Total trading volume over the last 24 hours dropped 18.36% to US$82.90 billion.
  • U.S. equities closed mixed on Wednesday. The Dow Jones Industrial Average fell 0.87%, the S&P 500 dipped 0.70% and the Nasdaq Composite Index edged up 0.05%.
  • The market slumped earlier in the session after Credit Suisse shares fell almost 30% following the bank’s Tuesday statement of “material weaknesses” in financial reports. This prompted the Swiss National Bank to say it would provide Credit Suisse with liquidity if necessary, easing the selling pressure.
  • On the U.S. inflation front, the February Producer Price Index released on Wednesday rose 4.6% on year, or lower than the projected 5.4%, according to Reuters. The number suggests inflation is slowing and adds to projections the Federal Reserve may pause planned interest rate hikes in coming months, especially against the backdrop of failing banks.
  • The U.S. consumer price index (CPI) rose 6% on year in February, a deceleration from 6.4% in January, but still well above Fed’s goal to keep annual inflation below 2%.
  • After eight interest rate hikes since March 2022, U.S. interest rates are now between 4.5% to 4.75%, the highest since October 2007.  Analysts at the CME Group expect a 54.6% chance the Fed will raise rates by 25 basis points this month. The chance of no rate increase is at 45.4%, more than doubling from 20.3% on Wednesday.
  • The volatility in U.S. markets this year as traders try to position themselves ahead of moves by the Fed hasn’t deterred foreign investors, with net capital inflows in January climbing to a one-year high of US$183.1 billion as overseas investors snapped up long-term securities.
  • U.S. stock futures rose on Thursday morning in Asia, pointing to some return of confidence for trading later in the day. At 09:30 a.m. in Hong Kong, Dow Jones Industrial Average futures rose 0.19%. The S&P 500 futures moved up 0.28% and the Nasdaq Composite Index edged 0.41% higher.

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