The crypto market has experienced a notable decline, shedding 2.04% in the past 24 hours, extending a 7-day slump of 8.49%. This downturn is attributed to a combination of factors, including uncertainty surrounding Federal Reserve policy, mass liquidations of leveraged positions, and cautious investor sentiment, particularly with altcoins showing signs of underperformance.
Following the recent rate cut done by the Federal Reserve in September, the markets are still adapting to mixed signals leading to a wave of liquidations in the tune of 1.7 billion, which further increased the instability of the market.
Moreover, the derivatives have contributed to this pressure with the open interest rising to $1.12 trillion, increasing by 9% in a single day. The increase in open interest is a sign of increasing bearishness, with more investors making negative bets regarding the way the markets would turn.
ETH and BTC Struggle as Crypto Market Faces Major Decline
Alternative coins have not been doing well especially Ethereum (ETH). The markets dominance of Ethereum has decreased to 12% as compared to 14.% in the last one month which is clearly a sign of risk-off shift.
The price of ETH also fell below the level of $4,000, and is at the present level of $3,900, with the market being exposed to the ongoing negative movement. Bitcoin (BTC) has been no exception and its price has been fluctuating around the realm of $109,000, indicating the inability of the entire markets.
The crypto market today experienced significant movements with BlackRock filing for a new Bitcoin ETF and a group of European banks coming together to build a euro-backed stablecoin.
BlackRock Expands Crypto Offerings with Bitcoin Premium Income ETF
BlackRock has moved to introduce its newly made product BTC Premium Income ETF, which is an investment product that intends to diversify its cryptocurrency portfolio.
The suggested ETF will buy covered call options of the BTC futures so the company could receive premiums and earn yield. But this strategy may restrict a potential income as compared to its current spot Bitcoin ETF that tracks the price of Bitcoin directly.
The new product would be an addition to iShares Bitcoin ETF (IBIT), the largest Bitcoin ETF that already received over 60 billion of inflows since its launch in January 2024 at BlackRock.
The investment products aimed at Bitcoin that BlackRock has launched indicate that the company is keen on securing a bigger portion of the crypto market that is currently growing.
European Banks Collaborate on MiCA-Compliant Euro Stablecoin
In another notable development, nine major European banks, including ING and UniCredit, have joined forces to develop a euro-pegged stablecoin in line with the European Union’s Markets in Crypto-Assets (MiCA) regulation. The stablecoin that will be released in 2026 will be an attempt to provide a stable and compliant digital currency to the European markets.
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The project is aimed at giving Europe a possible alternative to the US-led stablecoin market in addition to assisting the EU to achieve its objective of financial independence and strategic autonomy in payments. The other banks that have been involved such as CaixaBank, Raiffeisen Bank among others have established a new corporation in Netherlands that will be in charge of the development of this new digital asset.
The actions of these powerful players speak to the increased role of financial institutions in the future of the crypto market and digital payments.
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