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Crypto Loses $500B, but Gold and Silver Wipe Out $10T in Days

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Crypto Loses $500B, but Gold and Silver Wipe Out $10T in Days


Both precious metals plunged in the past few trading days.

The broader market correction continues in crypto, as bitcoin just slumped below $75,000 for the first time in almost a year, with ETH dumped beneath $2,200.

While this sounds bad, because it is, it’s also worth looking for a different perspective, which might show that ‘we are still early’ in crypto.

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The Crypto Calamity

Bitcoin traded above $90,000 just a few days ago. The asset challenged that resistance on Wednesday before the first FOMC meeting for the year. However, it failed there perhaps due to the Fed’s decision to pause the interest rate cuts or the growing tension in the Middle East.

Since then, the cryptocurrency plummeted to $81,000, rebounded slightly to $84,000 on Friday, and fell below $76,000 on Saturday. Monday morning began with another nosedive to a fresh multi-month low of $74,400 (on Bitstamp). This meant that BTC had lost over $15,000 in less than a week, and almost $10,000 in 36 hours.

Naturally, most altcoins followed suit, with many amplifying bitcoin’s losses. The total crypto market cap shed around $300 billion since Saturday and $500 billion since Wednesday. Over-leveraged traders were wrecked for more than $2.5 billion during the weekend, while another $800 million, mostly from longs, has been liquidated in the past 24 hours.

Gold and Silver Drop Hard(er)

Bitcoin is often blamed for being too volatile. And, that’s not entirely untrue, as explained above. However, the current market environment across all financial fields is highly atypical. Whether it’s the geopolitical uncertainty, the behavior of certain country leaders, or something else, even the oldest safe-haven assets have behaved irrationally lately.

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Gold has been the largest non-real estate asset for decades. It was joined by silver in the past few months as it skyrocketed to fresh peaks of over $120 in a matter of weeks. At the same time, gold tapped $5,600 to register yet another all-time high. On Friday, though, something broke in the precious metal market.

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Silver went from over $121 to $72 on Friday and $70.5 today, while gold dropped from $5,600 to $4,400 earlier today. This meant that both of those assets erased $10 trillion from their combined market caps in just a couple of days.

From a crypto perspective, it’s clear that the ‘we are still early’ narrative is valid. After all, gold and silver shed $10 trillion – with a T. That’s more than three times the size of the entire cryptocurrency market. And, even with this massive drop, silver alone is bigger than the market caps of bitcoin and all altcoins combined.

What about gold, you might ask? Well, the yellow metal’s market cap is over 10x larger than BTC and the alts. So yes, we just might be still early.

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Crypto World

US Lawmakers Introduce Bill to Crack Down on Prediction Markets War Bets

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Law, Congress, United States, Prediction Markets

Two Democratic lawmakers in the US Congress have introduced legislation in response to “government corruption” over bets on prediction markets platforms.

In a Tuesday announcement, Texas Representative Greg Casar and Connecticut Senator Chris Murphy said they had introduced the Banning Event Trading on Sensitive Operations and ​Federal Functions (BETS OFF) Act after several Polymarket accounts made “highly unusual bets” that a war between the US and Israel against Iran would begin.

Murphy said on March 4 that it was likely that people with “inside information” of US President Donald Trump’s plan to bomb Iran had made the bets.

“We shouldn’t live in a country where someone sitting in the situation room making decisions about whether to invade or to bomb, decisions about war and peace, life and death, that those decisions could be driven by the fact that they have hundreds of thousands of dollars riding on the decision,” said Casar.

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Law, Congress, United States, Prediction Markets
Source: Representative Greg Casar

The bill is the latest twist in US lawmakers’ efforts to crack down on prediction market platforms and accounts allegedly using insider information to profit from government actions. Last week, California Senator Adam Schiff introduced the DEATH BETS Act to prevent prediction markets platforms from listing events contracts related to war, terrorism, assassination and individual deaths.

Related: Arizona AG files charges against Kalshi over ‘illegal gambling‘

Platforms like Polymarket and Kalshi offer bets on a variety of outcomes, including sporting events and US politics. However, users betting on the specifics of the US-Israel conflict with Iran have ignited controversy in many areas of government. On Monday, a military correspondent with the Times of Israel said that he had received death threats over his report of the date when an Iranian missile had struck Israel, all “in order to resolve a prediction on Polymarket.”

War-related bets still live on Polymarket

As of Tuesday, Polymarket still offered users the opportunity to place bets on the outcomes of several potential decisions in the US-Israel conflict against Iran, including on whether the US would send ground forces into the country, when a ceasefire might happen, and changes to Iranian leadership.

“The promise of prediction markets is to harness the wisdom of the crowd to create accurate, unbiased forecasts for the most important events to society,” said Polymarket in a note on Middle East markets. “That ability is particularly invaluable in gut-wrenching times like today. After discussing with those directly affected by the attacks, who had dozens of questions, we realized that prediction markets could give them the answers they needed in ways TV news and [X, formerly Twitter] could not.”

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Kalshi, in contrast, offered event contracts related to the Iranian conflict but not on specific military actions, such as if the country might reach a nuclear deal with the US and whether Trump or other elected officials might visit Iran.

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