- The cryptocurrency market plunged on Monday, shedding around $367 billion in value over a 24-hour period, before recovering some later in the day.
- Bitcoin and ether each saw dramatic drops as investors sold out of risky assets.
- The slide comes after the Nasdaq wrapped up its worst three-week stretch in two years.
Led by a drop of 15% in bitcoin in the past 24 hours and a 22% plunge in ether, the overall value of cryptocurrencies sank by about $367 billion, according to CoinGecko data, the the market recovered some later in the day. The drop in crypto prices led to more than $1.13 billion in liquidations in the derivatives markets, crypto data firm Coinglass says.
The selloff in the crypto market coincided with a broader slide in equities in Asia-Pacific markets. Japan’s Nikkei 225 dropped over 12%, extending losses that began last week, after the Bank of Japan announced it would hike its benchmark interest rate to the highest level in 16 years. It was the worst day for the index since the “Black Monday” crash in 1987.
In the U.S. the Nasdaq slid 3.4% last week into correction territory, capping off the tech-heavy index’s worst three-week stretch since September 2022, when the market was in freefall. Amazon and Nvidia contributed to the declines. The index fell another 3.4% on Monday.
Last week’s drop in stocks was tied in part to disappointing earnings, a weaker-than-expected jobs report, higher unemployment and a declining manufacturing sector. The U.S. Federal Reserve opted to hold its benchmark rate steady and didn’t promise a rate cut in September, which many market experts had baked into their forecast. Lower interest rates tend to correlate with better performance for risky assets.
Bitcoin’s price has reached its lowest level since February and briefly fell below the $50,000 price threshold to $49,111.10. The world’s largest cryptocurrency is trading just below $51,000. It’s still up almost 17% this year.
The price of ether, the native token underpinning the ethereum blockchain, fell to around $2,200 and has erased its gains for the year. Binance’s BNB token was down 20% and solana is trading 22% lower.
Investors are also looking out for new trade data from China and Taiwan this week, as well as central bank decisions in both India and Australia.
The latest crypto wipeout will be felt by a broader base of investors after the SEC this year approved new spot exchange-traded funds for bitcoin and ether. The ETFs have seen hundreds of millions of dollars flow into the coins.
On Friday, CNBC reported that Morgan Stanley would soon allow its 15,000 financial advisors to pitch bitcoin ETFs to its clients, a first for Wall Street.
