Bitcoin And Ether Hit New Lows As Crypto Market Sours
What’s going on here?Bitcoin and ether tumbled to multi-month lows this week, with cautious investors yanking cash out of crypto and wiping out bitcoin’s gains for the year – along with $1.2 trillion from the entire digital asset market.What does this mean?The sell-off hit both cryptocurrencies and stocks tied to digital assets, after traders lost faith in the odds of quick US Federal Reserve rate cuts. Bitcoin slid to $85,350 – a seven-month low – and finished the week down about 8%. Ether dropped nearly 16% since January, falling to $2,777. These moves followed a standout rally last fall, when hopes for regulatory approval sent bitcoin above $120,000. But that optimism didn’t last: volatility has surged, AI-related stocks have dropped, and over $19 billion in leveraged bets were wiped out in the recent crypto crash. Major new spot bitcoin ETFs launched in Hong Kong logged one-day drops of almost 7%. And companies loaded up on bitcoin – like MicroStrategy and Japan’s Metaplanet – have seen their shares tumble, with Metaplanet down nearly 80% from its June high. Market research from CryptoQuant suggests bearish sentiment is now at its worst since before 2023’s bull run, hinting the recent boom cycle could be over.Why should I care?For markets: Crypto’s chill sends shockwaves through risky assets.Risk-taking is losing its appeal – not just in crypto, but across tech and AI stocks that have dropped alongside digital assets. The latest downturn highlights how closely crypto fortunes are tied to broader market sentiment, and ongoing volatility could keep institutional investors wary. Stocks with big stacks of bitcoin on their balance sheets have taken a bigger hit than traditional indexes, underscoring how sharply they can feel crypto’s swings.The bigger picture: Crypto reset fuels global caution.With central banks holding steady on interest rates, markets are rethinking their appetite for risk. The crypto slide comes after a heady surge fueled by dreams of mainstream adoption and friendly regulation, but $1.2 trillion disappeared from the market in just six weeks. This shakeout is likely to reshape investor strategies and may slow down future crypto growth, showing how quickly confidence can fade when the wider economic mood shifts.
