The cryptocurrency market is experiencing a significant downturn, with Bitcoin and Ethereum leading the decline.
This decline in digital assets follows a decline in stocks, which has created uneasiness in global markets. “After a bad night for stocks in the US, crypto, like most asset classes, appears to be feeling a bit of a flow-on effect in sentiment,” said Benjamin Celermajer, co-investment manager at Magnet Capital.
The US stock market had its worst day since 2022 on Wednesday and megacap tech stocks tumbled. This pullback soured the mood of investors, and major US stock indexes mostly fell today.
The yen at one point rose to its highest level in more than two months against the dollar, reflecting growing bets that the interest rate gap between Japan and the United States would likely narrow. “Last night the yen strengthened against the dollar while crypto fell along with gold and oil,” said Fintech Partners analyst Andrew Stein.
In other news, eight new spot Ethereum ETFs launched in the US on Tuesday. The more than six-year-old Grayscale Ethereum Trust, ETH's largest with $8 billion in assets, has converted from a closed-end structure to an ETF. The transformation makes exits easier for arbitrageurs, and $811 million has left the product since the change. This has encouraged some caution even as other Ethereum ETFs withdraw money. “Grayscale exits have been huge, leading to underperformance and disappointment,” Stein added.
Noelle Acheson, author of the Crypto Is Macro Now newsletter, wrote that there may have been some “sell the news” pressure on ETH after the ETF launch, and that “may soon dry up” if market sentiment allows.
*This is not investment advice.
