Except for stablecoins pegged to the dollar and XRP, seven of the top 10 digital tokens were trading lower at 9.30 AM IST. Terra sank more than 9 percent, while Ethereum and Solana lost more than percent each.
Global crypto market capitalization is down roughly 4 percent to $ 2.27 trillion compared to last day. However, the total volume of the cryptocurrency market gained more than 2 percent to $ 104.65 billion.
The largest cryptocurrency by market cap, Bitcoin, faced a small sell-off and held around $ 48,000 and ETH also fell lower, said Edul Patel, CEO and co-founder of Mudrex. "If Ethereum falls below the crucial support at $ 4,000, we could see a major drop in altcoins," he added.
What is cooking in India?
Prime Minister Narendra Modi will make a final decision on the regulatory framework for cryptocurrencies amid conflicting views among stakeholders, two people familiar with the development said.
A high-level meeting was held on Thursday to consider all options, including concerns expressed by the Reserve Bank of India.
The Confederation of Indian Industries (IIC) suggested on Thursday that the government treat crypto tokens as 'securities' of a special class.
The suggestion from the industry body comes as the government is ready to present the bill on cryptocurrencies and regulation of the official digital currency, 2021, in the winter session of parliament.
Expert opinion
Bitcoin and Ethereum fell as concerns resurfaced that an Evergrande collapse would have a contagion effect on the markets despite the store of value properties many associate with cryptocurrencies, the CoinDCX research team said.
"Yesterday's sell-off was a clear indication that cryptocurrencies are still largely traded as risk assets. While it remains to be seen what the year-end price action will look like, with overall market sentiment remaining. unstable, "he added.
Former Reserve Bank of India Governor Duvvuri Subbarao has said that the central bank could lose control over money supply and inflation management if cryptocurrencies are allowed in the country.
NFT update
Non-fungible tokens or NFTs could have problems due to their classification and legality in the country, as the government seeks to define and regulate cryptocurrencies through a new regulation.
Discussions are ongoing between cryptocurrency stakeholders and government officials on how to regulate NFTs, which are a transferable store of value and can be moved abroad digitally, said two people familiar with the developments.
The government is looking to categorize cryptocurrencies as commodities, but many feel that calling NFTs the same way could only create further complications.
(Opinions and recommendations given in this section are those of analysts and do not represent those of ETMarkets.com. Consult your financial advisor before taking any position on the assets mentioned).
