NEW YORK - BlackRock Inc (NYSE:BLK)., the world's largest asset manager, raised concerns about the impact of stablecoins on Bitcoin, which led to a subsequent review by the Bank for International Settlements (BIS). The findings from the BIS have intensified negative views on the cryptocurrency market. This comes as data from Finbold’s CoinGlass indicated that there was a disproportionate number of short positions on specific cryptocurrencies like Chainlink (LINK) and Polygon (MATIC), suggesting the possibility of short squeezes given the high levels of exposure in the market.
On Friday, Chainlink's price dropped to $13.47, with shorts accounting for 53.12% of its futures contracts for the day. Similarly, Polygon experienced a decline to $0.83 with shorts slightly lower at around 52%. These figures represent significant bearish positions in comparison to their usual market activities and could trigger short squeezes under certain market conditions.
The focus on stablecoins by BlackRock and the ensuing BIS report underscores the heightened scrutiny and skepticism facing cryptocurrencies as they struggle with volatility and regulatory challenges. Investors and market watchers are paying close attention to these developments as they could have broader implications for the stability and valuation of digital assets across the board.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.