Cryptocurrencies experienced a downward trend on Wednesday, with bitcoin (BTC) dropping below $61,000 while U.S. stocks reached new record highs. BTC started the day at around $62,000 but gradually declined throughout the U.S. trading session, hitting $60,400, marking a 2.4% decrease over the past 24 hours. Ether (ETH) also saw a slight decline, dropping by 3.2% during the day.
The drop in prices may have been influenced by reports that cryptos seized in connection with the PlusToken ponzi scheme were being transferred to exchanges. Chinese authorities confiscated almost $4 billion worth of crypto, including ETH, BTC, dogecoin (DOGE), and XRP from the operators of PlusToken in November 2020. Recent data shows that 7,000 ETH, valued at $16 million, from the remaining $1.3 billion ETH has been moved to exchanges in the last 24 hours, indicating a potential intention to sell these assets.
In an unexpected turn of events, U.S. federal prosecutors charged several crypto trading firms and their employees with market manipulation and fraud. These charges included firms such as Gotbit, ZM Quant, CLS Global, and MyTrade. One of the individuals charged, Alexey Andryunin, co-founder of Gotbit, was known for faking exchange volumes for small crypto tokens to get listed on platforms like CoinMarketCap.
As a result of these charges, tokens like Robo inu (RBIF) and NexFundAI Token experienced significant price fluctuations. RBIF doubled in price briefly, while NexFundAI Token surged by 3,500% before the prosecutors disabled trading with the token. The NEX token, associated with the investigation, also saw a surge in value before plummeting.
Meanwhile, traditional markets saw positive movements, with the S&P 500 reaching a new all-time high and the Nasdaq climbing by 0.6%. The 10-year U.S. Treasury rates hit a two-month high of 4.08% as investors analyzed the minutes from the Federal Market Open Committee’s September meeting. The minutes indicated that while a majority of Federal Reserve officials supported a larger rate cut, there were differing opinions on the pace and size of future cuts.
Looking ahead, traders are now predicting a 21% chance that the Fed will maintain rates at the next meeting in November, up from zero a week prior. Expectations of a 50 bps cut have diminished significantly, showing the uncertainty surrounding future monetary policy decisions.
