Cryptocurrency Market Plunge Erases $270 Billion as Bitcoin and Ether Prices Drop
The value of cryptocurrencies took a significant hit on Sunday as investors opted to sell off risky assets, resulting in a downturn in the cryptocurrency market. Bitcoin experienced an 11% decline in the past 24 hours, while ether plummeted by 21%, leading to an overall drop of about $270 billion in the cryptocurrency market, according to data from CoinGecko.
This decline in the crypto market coincided with a broader downward trend in equities across Asia-Pacific markets. Japan’s Nikkei 225 saw a substantial 7% decrease, extending losses that commenced the previous week after the Bank of Japan announced a hike in its benchmark interest rate to the highest level in 16 years.
In the U.S., the Nasdaq experienced a 3.4% slide last week, entering correction territory, marking the tech-heavy index’s most challenging three-week period since September 2022. Companies like Amazon and Nvidia contributed to these declines. The drop in stocks was partially attributed to disappointing earnings, a weaker-than-expected jobs report, increased unemployment, and a declining manufacturing sector. The U.S. Federal Reserve chose to maintain its benchmark rate and refrained from promising a rate cut in September, contrary to market experts’ expectations. Typically, lower interest rates are associated with improved performance for risky assets.
Bitcoin’s price has now reached its lowest point since February, trading at approximately $54,000, although it remains up by nearly 23% for the year. Meanwhile, the price of ether, the primary token supporting the ethereum blockchain, fell to around $2,300, wiping out its gains for the year. Other cryptocurrencies like Binance’s BNB token and solana also experienced significant declines.
Investors are keeping an eye out for upcoming trade data from China and Taiwan this week, along with central bank decisions in India and Australia.
The recent downturn in the crypto market will have a broader impact on investors following the SEC’s approval of new spot exchange-traded funds for bitcoin and ether this year. These ETFs have attracted substantial investments into the coins. Additionally, it was reported by CNBC that Morgan Stanley is set to permit its 15,000 financial advisors to recommend bitcoin ETFs to clients, marking a first for Wall Street.
