Market Meltdown Overview
In a dramatic turn of events, the cryptocurrency market has experienced a massive $500 billion wipeout, just days after Trump’s announcement of a new US Crypto Reserve plan. The total crypto market capitalization plummeted from $3.1 trillion to $2.6 trillion, falling below pre-announcement levels.
Key Market Movements
Bitcoin, the leading cryptocurrency, has fallen 3% below its pre-announcement levels, shedding nearly $250 billion in market value within 12 hours. Ethereum faced an even steeper decline, dropping to $2,002 – an 8% decrease from its pre-announcement bottom of $2,173.
Understanding the Selloff
According to The Kobeissi Letter, the primary catalyst for this decline is a global shift toward risk-off assets, driven by:
- Heightened trade war tensions
- Broad economic policy uncertainty
- Record $2.6 billion in crypto fund outflows
- Retail investor sentiment swing from greed to fear
Safe Haven Asset Performance
While crypto markets tumble, traditional safe-haven assets like gold continue to shine, posting a 10% gain since the start of the year. This stark contrast challenges the narrative of cryptocurrency as a hedge against economic uncertainty.
Market Outlook
Despite the initial optimism surrounding the US Crypto Reserve announcement, market behavior suggests cryptocurrencies are increasingly correlated with traditional risk assets. At press time, Bitcoin trades at $83,594, with technical indicators suggesting continued volatility ahead.
Source: NewsBTC