Bitcoin and Ethereum Dip 7% as Crypto Markets Cool

Bitcoin fell below $41,000 and Ethereum below $2,200 on Monday as crypto markets took a dive after having rallied for the better part of two months.

Bitcoin is currently trading at $40,758, down 7% in the past day. This is after the market already saw $330 million in crypto futures contracts liquidated on Monday morning as BTC fell below $43,000. Total liquidations have now reached $516 million, according to CoinGlass.

Still, the 1-day dip is relative. It’s still 5% higher than it was at the start of the month, when BTC was changing hands for $38,688. The same can be said of Ethereum, which has lost 7% since yesterday and is currently trading for $2,185. That’s 7% higher than what it started the month at, according to CoinGecko.

The global crypto market capitalization, which has hovered around $1 trillion for the better part of the year, now sits at $1.6 trillion—down 6% since yesterday.

Elsewhere in the market, alts were taking a beating. ORDI (ORDI), which last week saw explosive growth and set an all-time high of $68.37, has slumped 14% in the past day. The token, easily the most popular BRC-20 token built on Bitcoin’s Ordinals protocol, is now trading for $45.11.

Pepecoin (PEPE), which last week jumped 26% during a spike in meme coin activity, has also cooled off. As of this writing, it has fallen 13% in the last day and is trading for $0.00000138.

Even as the some of the largest digital assets by market cap take a hit, there’s been good news for some alts.

A new report from digital asset manager CoinShares finds that institutional investors have been especially keen on Solana (SOL) and Avalanche (AVAX). Exchange-traded products meant to track the two coins saw $5 million worth of deposits last week. And while most of the gaming token category went red on Monday, Immutable (IMX) saw a 10% gain.

Meanwhile, Binance USD (BUSD)—a dollar-pegged stablecoin—lost its peg for a while on Monday. As of this writing, BUSD had dropped as low as $0.97, according to CoinGecko. Even though it’s a defunct stablecoin, there are still roughly 1.4 billion of the tokens in circulation.

One possible reason for the price turbulence: Most BUSD margin trading and futures contracts were automatically closed today, according to a Binance blog post.

BUSD has been on a steady decline since the SEC sent a Wells Notice to New York-based firm Paxos, which used to handle minting and redemptions of BUSD on behalf of crypto exchange Binance. In the aftermath, Paxos and Binance said that users could continue to redeem their tokens until February 2024.

The exchange said BUSD tokens that aren’t redeemed before Binance stops support will automatically be converted to FDUSD, a stablecoin issued by FD121 Ltd.