Cryptocurrencies are also being dragged down by the bearish spiral of the markets and are hitting the canvas. Just in the last 24 hours, Bitcoin prices have collapsed by just over 10%, sliding the world’s most valuable cryptocurrency to around 52,500 dollars, a threshold it hadn’t touched for several months. Even more pronounced is the decline registered by Ether: -21%.
Behind Bitcoin’s crash: the reasons
- In the last 24 hours, Bitcoin prices have collapsed by just over 10%, dropping to around 52,500 dollars.
- Even more drastic is the daily decline of Ether: -21%. This crash has brought the asset around 2,300, effectively erasing the annual gains it had registered so far.
- The collapse of the cryptocurrency market coincided with the shocking decline recorded today by Asian markets, particularly affected by the Bank of Japan’s decision to raise interest rates, bringing them to the highest level recorded in 16 years.
- Looking at Japan, the Nikkei 225 closed the session down 12.4% at 31,458.42. We are talking about what Cnbc highlights as its worst session since ‘Black Monday’ of 1987. Moreover, this is its largest recorded percentage decline in a single session (4,451.28 points). Also declining was the Topix, which fell 12.23%.
- Some of the largest listed companies in Japan closed down over 14%: Mitsubishi, Mitsui and partners, Sumitomo and Marubeni. Mitsui even lost almost 20% of its market capitalization.
- Looking at the U.S., last week the Nasdaq slipped 3.4%, marking its worst three-week period since September 2022, particularly due to declines in Amazon and Nvidia, but generally across the entire tech sector.
- Remaining in the U.S., futures currently indicate the Nasdaq down 5% at 17,623.50 points, with the S&P 500 and Dow Jones descending by 2.6% and 1.12% respectively.
- As highlighted by Forbes, the CBOE volatility index, often referred to as the market fear gauge, soared 58.7% on Monday morning, reaching 37.12, the highest level since 2020.
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In numbers
The last time Bitcoin was below 53,000 dollars was on February 26, when the cryptocurrency prices surged following the approval of spot ETFs. Moreover, as revealed by Cointelegraph, since August 2, in just three days, the market capitalization of cryptocurrencies has seen a crash of 510 billion dollars.
The context
This crash will definitely involve more investors than in the past. As mentioned earlier, this year the SEC has approved several exchange-traded spot ETFs on Bitcoin and Ether that have immediately attracted a lot of demand. Furthermore, last Friday, Cnbc reported that soon Morgan Stanley would allow its 15,000 financial advisors to offer spot ETFs on Bitcoin to their clients, a novelty for Wall Street. In all this, according to the monthly report from the Labor Department, the U.S. saw a growth of 114,000 jobs in July, well below analysts’ forecasts of 185,000. Last month, the country’s unemployment rate also rose from 4.1% to 4.3%, the highest level since October 2021.
Trump’s support for Bitcoin
The outcome of the upcoming American presidential elections could also have a significant impact on the cryptocurrency market, especially given Donald Trump’s clear favorable position towards Bitcoin. During the recent Bitcoin Conference in Nashville, the Republican candidate even compared it to “the steel industry of a hundred years ago that built America,” adding that “now blockchain has the potential to build the future of the global economy.” In just 15 years, Trump noted, “Bitcoin has gone from being an idea published anonymously on an online forum to becoming the ninth most valuable asset in the world. It is already bigger than Exxon Mobil and will soon surpass the entire silver market. And one day, probably, it will also surpass gold. There has never been anything like this before and I think you have never seen anything like it.”
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