Bitcoin and Ether Plunge Amid Market Selloff

Bitcoin (BTC) has plunged to its lowest level since February, while ether (ETH) fell below $2,200 on early Monday morning EST amid a broad crypto market selloff. Investors reacted to various news events, such as macroeconomic updates, Jump Crypto’s asset movements, and the increasing odds of Vice President Kamala Harris winning the upcoming U.S. election against pro-crypto Donald Trump.

Bitcoin dropped 16.53% over the past 24 hours, trading at $49,883, while ether fell 23.75% to trade at $2,186, marking its lowest level since January. Other top crypto tokens also saw declines, with BNB down 22.8% and XRP 19.8%. Overall, the crypto market has decreased by 18.2% in the past day.

Justin d’Anethan, head of APAC business development at Keyrock, remarked, “Unlike previous times, this market feels ETH-led instead of BTC-led,” citing factors such as ETH ETF trading and large investors unwinding their ETHE positions.

Factors Contributing to Decline

Min Jung, an analyst at Presto Research, identified certain factors for the decline:
– Lower than expected payroll numbers released last Friday, with only 114,000 jobs added, heightened recession fears.
– This led to 2.43% and 1.84% drops in the Nasdaq and S&P 500, respectively.
– Berkshire Hathaway selling nearly half of its Apple Inc. position during the second quarter, potentially adding pressure to the equities market.

Global stock market sell-offs appear to be spreading, with Japan’s Nikkei 225 and Topix indices plunged about 7%, nearing bear market territory, after the Bank of Japan raised its key interest rate.

Additionally, Jump Crypto began transferring hundreds of millions of dollars worth of crypto assets, igniting speculation about potential liquidation due to a U.S. Commodity Futures Trading Commission investigation. Jung stated, “Jump Trading has been transferring ETH to a centralized exchange amid rumors that they may be forced to exit the crypto business.”

US Election Uncertainty

The upcoming U.S. presidential election is generating uncertainty for crypto investors, as Vice President Harris is gaining approval. Polymarket’s election poll predicts a 45% chance of Harris winning, up from around 30% at Biden’s endorsement of her as his successor.

While Trump is known for his support of crypto, Harris’s stance is less clear. However, her campaign has begun efforts to engage the crypto community by adding David Plouffe, a former Binance advisor.

Jeff Dorman, CIO of Arca, opined that more support for Harris is unfavorable for crypto, while Jung noted that the Trump rally is no longer driving market sentiment. Investors are now looking for clarity on Jump Trading’s situation, election predictions, and potential dip-buying opportunities.

Keyrock’s d’Anethan reinforced that broader rates and the likelihood of a Trump win are crucial factors to watch and also highlighted concerns regarding Mt. Gox redemptions affecting crypto markets.

Updated (2:50 a.m., Aug 5, EST) to reflect the latest prices.