Coin World Report:
In the past 24 hours, the prices of Bitcoin and Ethereum have plummeted, falling below $67,000 and $2,500 respectively. This price drop occurred after news of an investigation into Tether, the issuer of USDT, was released. Additionally, the Israeli attack on Iran also played a role in this decline.
Why did the prices of Bitcoin and Ethereum crash?
The prices of Bitcoin and Ethereum have dropped below $67,000 and $2,500 respectively.
According to The Wall Street Journal, the US Department of Justice (DOJ) has launched an investigation into the cryptocurrency company Tether.
It is alleged that they are investigating whether this stablecoin issuer may have violated sanctions and anti-money laundering regulations.
Furthermore, the report also mentioned that the US Treasury Department is considering imposing sanctions on Tether and individuals and groups on the US sanctions list who conduct business with them. Due to fear and uncertainty among market participants, this news has triggered a massive sell-off in the cryptocurrency market, causing Bitcoin and Ethereum prices to decline.
Following the report, Tether’s CEO, Paolo Ardoino, mentioned in a post on Twitter that there is no evidence to suggest they are under investigation and that The Wall Street Journal is just “repeating old noise.” However, considering the further drop in prices after his statement, this declaration is not enough to stop the bleeding.
Prior to the report, Bitcoin prices were attempting to reclaim the $68,000 price level as support, while Ethereum prices were comfortably above $2,500. However, if the news is true, its impact is sufficient to disrupt the momentum of these cryptocurrencies, as the flagship cryptocurrency immediately dropped below $67,000.
In fact, considering that USDT is the largest stablecoin by market capitalization and widely used throughout the market, an investigation into Tether could have far-reaching implications for the cryptocurrency market. It is worth noting that following the release of the DOJ’s investigation report, the stablecoin lost its peg to the US dollar.
The Israeli attack on Iran also contributed to the price crash
The retaliatory Israeli attack on Iran also led to a plunge in Bitcoin and Ethereum prices. Israel attacked Iran in response to Iran’s missile strike earlier this month. This attack occurred on October 26th, in the early hours, while the cryptocurrency market was trying to rebound from the ripple effects of the so-called Tether investigation.
As expected, the Israeli attack on Iran also caused panic in the cryptocurrency market, as it further exacerbated the escalating tensions in the Middle East and increased the possibility of a regional war breaking out. Iran has yet to confirm whether it will retaliate against Israel, but Bitcoin and Ethereum seem to be responding to this.
Currently, the price drop of Bitcoin and Ethereum is not optimistic. Prominent analyst Justin Bennett stated in a post on Twitter that if the crash pattern continues into the weekend, any rebound next week will be a sell-off.
The price crash of Bitcoin and Ethereum occurred less than two weeks before the US presidential election. The cryptocurrency market was eagerly anticipating Donald Trump’s victory. Trump’s victory was considered favorable for the cryptocurrency market as the former US president publicly announced his support for cryptocurrencies.
