The cryptocurrency market saw a decline on April 29, with the total market value dropping by 2.82% to $2.23 trillion. Bitcoin, the largest cryptocurrency by market value, decreased by 1.84% to $61,940. On the other hand, Ethereum, the second largest cryptocurrency, traded around $3,155 after experiencing a 3.28% drop on the same day.

Decline in Crypto Market Valuation

The downturn in the cryptocurrency market was triggered by the decision of the Depository Trust Company (DTC) not to recognize crypto-linked exchange-traded funds as collateral for credit limit facilities. Credit limits are essential funds borrowed by financial institutions to facilitate transactions' clearing and settlement. This decision by DTC affects the liquidity and operational flexibility of financial institutions dealing with these products.

Independent market analyst Sakuzi expressed concerns about other major companies following DTC's decision, potentially impacting the crypto markets' liquidity and firms' ability to use crypto as collateral.

Market Outlook

Following days of outflows from U.S.-based spot Bitcoin ETF funds, the market experienced a decline. These outflows totaled $421.8 million since April 24, corresponding to a 4.75% decrease in the crypto market value. Investors have become cautious due to the disappointing performance of the U.S. economy against stable inflation in the first quarter of 2024. The upcoming May 1 meeting of the U.S. Federal Open Market Committee may lead to a higher interest rate policy, causing concerns among investors and institutional investors holding risky assets like crypto.

This downturn indicates a period of caution and reduced risk exposure among investors in the crypto market.

The original post can be found on COINTURK NEWS: Cryptocurrency Market Experiences Decline