Cryptocurrency Market Tumbles: Bitcoin and Ether Face Steep Declines

Bitcoin price plunges and ether has worst drop since 2021

Top token Bitcoin traded 11% lower at $52,680 as of 8:39 a.m. in London, adding to a 13.1% drop last week that was the worst since the period when the FTX exchange imploded. Ether shed over a fifth of its value before paring some of the slide to change hands at $2,342. Most major coins nursed losses. The declines come as a global stock selloff intensifies, reflecting concerns about the economic outlook and questions over whether heavy investment into artificial intelligence will live up to the hype surrounding the technology. Geopolitical tension is rising in the Middle East, adding to investor skittishness. US exchange-traded funds for Bitcoin suffered their largest outflows in about three months on Aug. 2. One question is whether the products will attract dip buyers when they resume trading, or witness a deeper efflux. Digital assets are a victim in part of the unwinding yen carry trade, as speculators adjust to higher interest rates in Japan, according to Hayden Hughes, head of crypto investments at family office Evergreen Growth. "Those investors are also fighting a drastic increase in hedging costs based on the volatility in the US dollar-Japanese yen trading pair," Hughes said. Bitcoin has been buffeted by a range of factors since hitting a record of $73,798 in March. That includes US political flux as pro-crypto Republican Donald Trump and Democratic opponent Vice President Kamala Harris -- who has yet to detail a digital-asset policy stance -- lock horns in the presidential race. Also hanging over the market are possible sales of Bitcoin seized by governments and the risk of a supply overhang from tokens returned to creditors through bankruptcy proceedings. Bond traders have amplified bets on US interest-rate cuts beginning in September to support economic expansion. The prospect of less restrictive monetary policy is actually "a good thing for crypto," argued Sean Farrell, head of digital-asset strategy at Fundstrat Global Advisors LLC. The Bitcoin retreat at its nadir Monday left the token at levels last seen in February. Ether, meanwhile, earlier fell back to prices previously seen at the turn of the year. Similar to Bitcoin, one unknown is how investors in new US spot-Ether ETFs will react. Justin D'Anethan, head of Asia-Pacific business development at market maker Keyrock, said the crypto rout appeared somewhat Ether-led, flagging social-media rumors of institutional-selling of Ether-related assets. About $900 million of bullish crypto positions were liquidated in the past 24 hours, Coinglass data show, a sign of leveraged bets coming unstuck. Khushboo Khullar, a venture partner at Lightning Ventures, which invests in Bitcoin-linked companies, said the broad stock slump had caused some "panic," spurring investors to rush for liquidity to settle margin calls. She argued the crypto retreat is a "fine buying opportunity." Bitcoin's year-to-date advance has moderated to approximately 21%, compared with an 18% climb in gold and an 8% jump in a gauge of global stocks.

Stock market crash: Bitcoin too plunges, Ether sees steepest fall; 5 factors behind the crash - Times of India

Cryptocurrencies suffered a severe downturn on Monday (August 5) as a wave of risk aversion swept through global markets. The fall in Cryto market worldwide mirrored the global mayhem in stock markets. Japan's Nikkei index has its worst day in decades. European stocks drop most in two years. Closer home, Bombay Stock Exchange closed 2000-plus points down. Similar to the stock market rout, Bitcoin plummeted over 16% at one point, marking its steepest decline since the FTX collapse.Ethereum also experienced its most dramatic fall since 2021. The broader cryptocurrency market was hit hard, with most major coins posting substantial losses. Bitcoin's value dropped by 11% to $52,680, following a 13.1% decline the previous week. Ethereum's price plunged by over 20% before partially recovering to $2,342. About $900 million of bullish crypto positions were liquidated in the past 24 hours, Coinglass data showed, as per a report in Bloomberg. The declines come as a global stock selloff intensifies, reflecting concerns about the economic outlook and questions over whether heavy investment into artificial intelligence will live up to the hype surrounding the technology. Geopolitical tension is rising in the Middle East, adding to investor anxiety. Key factors that contributed to the Crypto crash: * Global economic uncertainty: Concerns about a potential recession and the impact of heavy AI investments on the economy fueled a stock market selloff, which negatively affected cryptocurrencies. * Geopolitical tensions: Rising tensions in the Middle East added to investor anxiety. * Unwinding yen carry trade: As investors adjusted to higher interest rates in Japan, they reduced their exposure to riskier assets like cryptocurrencies. * US political climate: The ongoing presidential race, with its implications for crypto regulation, created uncertainty in the market. * Bitcoin supply concerns: Potential sales of seized Bitcoin and a supply overhang from bankruptcy proceedings weighed on prices. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.