Bitcoin, ETH, and XRP Crash: Here’s Why — Has the Bottom Been Reached?
Bitcoin Falls Below $54,000, Reaches Lowest Level Since February. Ether Slips Below $2,400 Amid Widespread Crypto Market Selloff. On Sunday evening, the crypto market experienced a significant flash crash, with Bitcoin dropping 9.65% to its lowest level since February and Ether falling below $2,400. This decline reflects investor reactions to various news events, including macroeconomic [...]
- Bitcoin Falls Below $54,000, Reaches Lowest Level Since February.
- Ether Slips Below $2,400 Amid Widespread Crypto Market Selloff.
On Sunday evening, the crypto market experienced a significant flash crash, with Bitcoin dropping 9.65% to its lowest level since February and Ether falling below $2,400. This decline reflects investor reactions to various news events, including macroeconomic updates, movements by Jump Crypto, and the increasing likelihood that Kamala Harris could win the upcoming U.S. election against pro-crypto Donald Trump.
#Bitcoin price has fallen to $54,000—here’s why:
Japan's rate hike
Will #XRP and #BTC rise again? Yes! Retweet if you buy the dip!… pic.twitter.com/uQaSPXwdEF
— Collin Brown (@CollinBrownXRP) August 5, 2024
Bitcoin temporarily fell below $54,000 before recovering slightly to trade at $54,698. Ether also hit its lowest level since February, dropping 19.45% to trade at $2,333. Among the largest cryptocurrencies, BNB declined by 12.88%, and XRP fell by 13.38%.
Reasons for the Crypto Crash
Justin d’Anethan, Head of APAC Business Development at Keyrock, elaborates:
“This decline is due to ETH ETF trading and large investors liquidating their positions in the Grayscale ETH Fund (ETHE).”
Min Jung, analyst at Presto Research, explained that the drop in Bitcoin and Ether resulted from several factors:
“First, the labor market numbers released last Friday were much lower than expected, with only 114,000 jobs added. This has heightened recession fears, leading to a 2.43% drop in the Nasdaq and a 1.84% drop in the S&P 500.”
Jung also noted that news over the weekend that Warren Buffett’s Berkshire Hathaway sold nearly half of its Apple Inc. position in the second quarter could further pressure the stock market.
Additionally, over the weekend, Jump Crypto, the crypto arm of Jump Trading, began moving hundreds of millions of dollars worth of assets, including Ether and USDT.
According to Spot On Chain, Jump Trading has transferred another 17,576 ETH worth $46.78 million to CEX in the past 24 hours. Jump Trading currently still holds 37.6K wstETH (worth $101 million) and 11.5K STETH (worth $26.3 million) and is in the process of unstaking Lido… https://t.co/9VPwCzPOtY
— Wu Blockchain (@WuBlockchain) August 5, 2024
This led to speculation that the company might liquidate its crypto holdings as part of an investigation by the U.S. Commodity Futures Trading Commission.
“Jump Trading has moved ETH to a centralized exchange amid rumors that they may be forced to exit the crypto business due to a CFTC investigation,” Jung said.
At the same time, the upcoming U.S. presidential election is becoming an increasing source of uncertainty for crypto investors, as approval ratings for U.S. Vice President Harris rise. The election poll by decentralized prediction platform Polymarket currently forecasts a 45% chance of Harris winning, up from around 30% when Biden dropped out of the race and endorsed Harris as his successor.
While Trump is a strong supporter of crypto, Harris has yet to match his support for the industry. However, the Harris team has reportedly brought in David Plouffe, a former member of the Binance Global Advisory Board and global strategic advisor for Alchemy Pay, for crypto outreach efforts.
Jeff Dorman, Chief Investment Officer of crypto asset management company Arca, wrote in a post on X that more support for Harris is “bad for crypto.”
“Even if Democrats are less hostile to crypto, the entire stock and crypto market favors a Trump victory,” Dorman said.
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