Cryptocurrency markets have experienced an alarming dip in worth over a short period of time. In just one hour, they lost as much as $50 billion in market capitalisation. It was difficult to ignore the effects as news of potential harm to the sector continued to emerge.

In particular, the total crypto market cap reduced from $1.07 trillion to $1.02 trillion in 60 minutes on 3rd March. This decline was linked with a variety of unfavorable circumstances, including the Silvergate crypto bank fiasco, the upcoming ‘hot’ Consumer Price Index (CPI), Mt. Gox’s huge payments to creditors for Bitcoin (BTC) refunds, and the resulting ‘FUD’ (Fear, Uncertainty, and Doubt).

A Series of Unfortunate Events

Financial experts claim that the CPI report at the Federal Reserve’s March Meetings could boost inflation by up to 50 basis points (bps). This is according to Priya Misra from TD Securities and Gene Goldman from Cetera Investment Management, as reported by Reuters in Late February.

Crypto industry members are concerned about the possibility of creditors of the bankrupt crypto exchange receiving huge payments. This could result in a significant BTC price dip, as the creditors may sell up to $2 billion worth of BTC in order to get the funds.

The US Treasury’s proposed regulations are also causing a lot of uncertainty. These regulations could lead to stronger control over crypto exchanges and other crypto-related companies, with increased costs, reduced liquidity, and other negative impacts on the industry.