Crypto Crash: Bitcoin and Ethereum Tumble as Market Values Plunge

Crypto Crash: Bitcoin and Ethereum Tumble as Market Values Plunge

On Sunday, the cryptocurrency market suffered a significant downturn, driven by a wave of investor sell-offs targeting high-risk assets. Bitcoin led the decline with an 11% drop in the past 24 hours, while Ethereum experienced a dramatic 21% plunge, resulting in a total market value loss of approximately $270 billion, as reported by CoinGecko.

This selloff in the crypto sector aligns with a broader downtrend in equities across Asia-Pacific markets. The Nikkei 225 in Japan plummeted by up to 7%, extending losses from the previous week following the Bank of Japan’s decision to raise its benchmark interest rate to a 16-year high.

In the U.S., the Nasdaq index fell by 3.4% last week, entering correction territory and marking its worst three-week period since September 2022. The decline was exacerbated by poor earnings reports, a disappointing jobs report, rising unemployment, and a shrinking manufacturing sector. The U.S. Federal Reserve's decision to maintain its benchmark rate without signaling a rate cut in September did not meet market expectations, which had anticipated a rate reduction.

Bitcoin’s price has now dropped to its lowest level since February, trading around $54,000. Despite this, it remains up nearly 23% for the year. Ethereum's price fell to approximately $2,300, erasing its yearly gains. Binance’s BNB token saw a decline of over 15%, and Solana’s price fell by 10%.

Investors are closely watching for new trade data from China and Taiwan this week, as well as central bank decisions from India and Australia. The recent downturn in the crypto market impacts a broader range of investors following the SEC's approval of new spot exchange-traded funds (ETFs) for Bitcoin and Ethereum earlier this year. These ETFs have attracted hundreds of millions of dollars into the cryptocurrencies. Additionally, CNBC reported on Friday that Morgan Stanley is set to enable its 15,000 financial advisors to offer Bitcoin ETFs to clients, marking a significant move for Wall Street.