Bitcoin And Ethereum Losses Headline $125 Billion Cryptocurrency Market Tumble, While NFT Sector Breaks New Records

The global cryptocurrency market endured a $125 billion pullback over the past 24 hours, losing 6.21% of its market capitalization as of the early morning.

The decline is led by bitcoin, which has shed 4.63% and is trading near $47,330 at 5:33 a.m. ET. The top cryptocurrency had briefly climbed above $50,000 for the first time since May following a stream of positive news, including cryptocurrency exchange Coinbase announcing a $500 million crypto purchase program and United Wholesale Mortgage, second largest mortgage lender in the U.S., starting to accept bitcoin for payment. 

Despite the surge, some analysts stayed cautious. Medium-term U.S. and China regulatory headwinds remain, noted Jehan Chu, founder and managing partner of Hong Kong-based crypto investment firm Kenetic Capital, in a message to Forbes. The world’s largest exchange Binance remains under heavy enforcement pressure, and SEC Chairman Gary Gensler’s ominous comments on regulating DeFi could cut the legs out of any sustained rally. Expect the near-term pump to find sub-$30,000 BTC prices if broader U.S. economic sentiment suddenly turns south, Chu warned.

Adding to the pressure is the inflow of coins to cryptocurrency exchanges, which means investors could be preparing to sell. 22,803 BTC, or over $1 billion, moved onto exchanges since Friday, according to William Clemente, lead insights analyst of Blockware Solutions. 

Second largest cryptocurrency, ether, is also in retraction mode, having declined 6.7% over the past 24 hours to $3,123. Altcoins are following the trend, with XRP, Polkadot and Solana bearing the largest losses among the top 10 in the 9-11% range. 

In contrast to cryptocurrencies, the market for non-fungible tokens is hitting new peaks. With the news of payments giant Visa buying its first NFT for $150,000, NFTs have caught on a new wave. Trading volume of NFT collection CryptoPunks, one of which Visa has famously bought, is up by 430% this week, according to DappRadar. One of these algorithmically generated characters sold for $5.33 million overnight. Leading collectibles marketplace OpenSea has set multiple daily records this month, reaching a new high of $209 million in trading volume yesterday, according to data from Dune Analytics. 

Additionally, Budweiser appears to be the latest brand jumping on the NFT bandwagon. The company has changed its Twitter profile picture to that of a rocket ship designed by NFT artist Tom Sachs. The company may have also bought a beer.eth domain name, CoinDesk reports.

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