The cryptocurrency market saw a significant drop in value on Sunday, continuing into Monday morning, as investors moved away from risky assets.
Bitcoin fell by 15% in the past 24 hours, and ether dropped by 22%, causing the overall cryptocurrency market value to decrease by about $367 billion, based on CoinGecko data. There was some recovery later in the day. This price drop led to more than $1.13 billion in liquidations in the derivatives markets, according to crypto data firm Coinglass.
This crypto market selloff happened alongside a broader decline in Asia-Pacific stock markets. Japan’s Nikkei 225 fell over 12%, continuing losses from last week after the Bank of Japan announced it would raise its benchmark interest rate to the highest level in 16 years. This was the worst day for the index since the “Black Monday” crash in 1987.
In the U.S., the Nasdaq fell 3.4% last week, entering correction territory, marking its worst three-week period since September 2022, when the market was plummeting. Amazon and Nvidia were among the contributors to the declines. The index dropped another 3.4% on Monday.
The stock market drop last week was partly due to disappointing earnings, a weaker-than-expected jobs report, higher unemployment, and a shrinking manufacturing sector. The U.S. Federal Reserve decided to keep its benchmark rate steady and did not promise a rate cut in September, which many market experts had expected. Lower interest rates usually correlate with better performance for risky assets.
Bitcoin’s price reached its lowest level since February, briefly falling below $50,000 to $49,111.10. The world’s largest cryptocurrency is now trading just below $51,000, still up almost 17% this year.
The price of ether, the native token of the Ethereum blockchain, dropped to around $2,200, erasing its gains for the year. Binance’s BNB token fell 20%, and Solana is trading 22% lower.
Investors are also keeping an eye on new trade data from China and Taiwan this week, as well as central bank decisions in India and Australia.
The latest crypto market downturn will impact a broader range of investors after the SEC approved new spot exchange-traded funds for bitcoin and ether earlier this year. These ETFs have attracted hundreds of millions of dollars into the coins.
