The cryptocurrency market today is trending lower with Bitcoin price today plunging below the $30,000 level following a brief uptick just earlier this week. The world’s largest and most popular cryptocurrency dropped to a whopping 2.9% and was trading at $29,276.07. Notably, the digital token is down more than 35% so far this year (YTD), and is trading far below its record high of $69,000 it had hit in November last year. The total cryptocurrency trading volume in the last 24 hours is at $68.2 billion with bitcoin dominance at 44.7% and Ethereum dominance at 16.2%.
Additionally, ether, the coin linked to the Ethereum blockchain and the second-largest cryptocurrency, dropped even further to 6.9% trading at $1,673.61. Dogecoin is trending below 4.1% today trading at $0.076157 and Shiba Inu also dropped to 3.4% to $0.00001024.
Other digital tokens witnessed mixed performance with Cardano and Polkadot seeing a steep dip. Stellar, Uniswap, XRP, Tron, Tether, Solana, Avalanche, Polygon, Chainlink, and Terra Luna Classic also witnessed a mixed performance in the last 24 hours.
Meanwhile, the chief Economic Adviser V Anantha Nageswaran on Thursday said cryptocurrencies are akin to a world of Caribbean pirates’ in the absence of a centralized regulatory authority and are yet to pass the test of a fiat currency.
He said that the government is pursuing a ‘high-wire balancing act’ to ensure that the gains in growth, inflation, and rupee stability of the last four years are not frittered away.
He said the recent development in Terra-Luna cryptocurrency, which witnessed a massive meltdown last month, is a ‘very important cautionary tale’.
“I wouldn’t be very excited by them (cryptocurrency) because sometimes we may not be fully aware or comprehend the kind of forces we are unleashing ourselves. So I would be somewhat guarded in my welcome of some of these FinTech-based disruptions like Decentralised Finance (DeFI) and crypto etc,” Nageswaran said.
He further said that, unlike fiat money, cryptocurrencies cannot satisfy basic requirements such as having store value, widespread acceptability, and unit of account.
Nageswaran said that he agreed with RBI Deputy Governor T Rabi Sankar who had been saying that as of now there appeared to be a case of ‘regulatory arbitrage’ with regard to cryptocurrencies and decentralized finance rather than a case of true financial innovation.
“The more decentralized they become and the absence of a watchdog or a centralized regulatory authority also means that there is a world of Caribbean pirates or a world of ‘winner takes all’ in terms of being able to really take it all from somebody else,” he noted.
The government is working on a consultation paper on cryptocurrencies and is taking inputs from various stakeholders and institutions, including World Bank and IMF.