Cryptocurrency investors are becoming increasingly concerned as Ether prices took a tumble on Friday. The value of Ether dropped 3% according to Coin Metrics, after losing 5% the day prior, reaching its lowest point in over a year on Jan. 25.
Bitcoin also experienced losses as the price dropped 1% to $21,693.64, its lowest level since late 2012. By the end of the week, both Bitcoin and Ethereum had declined by 8% and 7.7%, respectively.
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Anxiety over crypto staking regulation intensifies
Staking anxiety rose further when crypto exchange Kraken shut down its staking program earlier this week as part of a $30 Million settlement with the US Securities Exchange Commission. Additionally, Coinbase CEO Brian Armstrong has expressed worries about a potential crackdown on staking or staking services in the US.
Staking allows investors to lock up cryptocurrency for a certain period of time to earn interest and secure a position in a network validator, which processes and verifies transactions. This option is only available on networks such as Ethereum that use the “proof-of-stake” protocol, whereas Bitcoin uses the “proof-of-work” protocol.
The moves by Kraken and the worries voiced by Armstrong have caused apprehension around the crypto market, particularly the staking options offered by exchanges like Kraken and Coinbase.
