Cryptocurrency Values Plummet in Conjunction With Worldwide Stock Market Decline

The crypto market experienced a sharp downturn this morning, in sync with worldwide market trends.

Over the past day, Bitcoin (BTC) has seen its value decrease by 11%, falling to $54,070, and even hitting a low of $52,350, the weakest point since February, as reported by CoinGecko.

ETH along with Ether staking derivatives find themselves among the bottom five performers within the top one hundred assets of the past day. ETH’s value plummeted by 19% to $2,350, with a low reaching $2,120, marking an eight-month low point.

The total market capitalization for cryptocurrencies has nosedived by 12.9%, reaching $1.96 trillion over the last 24 hours, resulting in a staggering loss of over $292 billion from the total value of digital assets. The last time the combined market cap of digital assets fell below $2 trillion was in February.

In the past 24 hours, over 217,000 traders utilizing leverage in the crypto space have endured liquidations totaling $841.3 million, with CoinGlass reporting that ETH accounted for $310 million and BTC for $255 million of these liquidations.

ETH traders may have been particularly impacted by the market downturn, following the recent launch of spot Ether ETFs, which had led many investors to adopt a long position.

Every non-stablecoin cryptocurrency within the top 100 by market cap experienced losses. The worst hit were Bittensor (TAO), Render (RENDER), and Lido (LDO), each losing nearly a quarter of their value.

Stock Market Turmoil

Stock markets in Asia triggered the crypto slump, with indices experiencing their steepest decline since the onset of the COVID pandemic.

The Japanese Nikkei 225 index plummeted 8.6%, accumulating a 14% loss over three days.

Adjacent markets also experienced sharp declines, with Taiwan’s Taiex free falling 8.2%, Singapore’s Straits Times Index dropping 3.1%, Hong Kong’s Hang Seng Index losing 1.3%, and Australia’s All Ordinaries index decreasing by 3.4%.

The South Korean Kospi slid 5% prior to a temporary trading suspension implemented by regulators, ending the day with a 7.4% loss.

This market dive was largely caused by the mass unwinding of carry trades in Japanese Yen. Traders had been borrowing Yen, taking advantage of Japan’s low-interest rates and investing in markets with higher returns.

For more than a decade, the Yen has been widely used for cheap leveraging in carry trades. Yet, the recent 12% surge in Yen value has forced a reversal in investors’ strategies.

Further concerns about a potential recession in the U.S. have been fueled by recent disappointing job figures and the prospect of sustained high interest rates. Speculation that the Bank of Japan may soon raise its interest rates has compounded these fears, causing further unwinding of positions.

The forecast for U.S. stock markets suggests continued distress: the Nasdaq, already 10% below its July peak, is poised to open an additional 5% lower today.