Bitcoin Plunges Below $58K as Crypto Market Crashes on Thursday
Date: 2024-08-16 Author: Henry Casey Categories: CRYPTO PAYMENTS
A few days of relative calm in cryptocurrency markets ended with a sudden collapse on Thursday afternoon during U.S. trading. Bitcoin (BTC) fell to its lowest level since the start of the August panic, falling sharply to $57,700, down 3% from an hour earlier. Other major cryptocurrencies like Ethereum (ETH) and Solana (SOL) also saw significant losses. The CoinDesk 20 Index, which measures overall market health, has fallen 3% in the past 24 hours.
The summer of 2024 has already seen two major crashes in the crypto market. The first occurred during the US Independence Day celebration on July 4, when it was announced that the German government would sell 50,000 bitcoins confiscated during a criminal investigation. The second crash occurred about two weeks ago, when a seemingly minor rate hike by the Bank of Japan triggered a global decline in stock markets, which also affected all risk assets, including cryptocurrencies.
Today's crash, at first glance, has no obvious cause. On the contrary, US stock markets have shown impressive growth: the Nasdaq rose by 2.4%, and the S&P 500 by 1.6%, returning to the levels before the August panic.
Ignoring the positive news
For crypto bulls, the current situation is disappointing. Despite the positive news, prices continue to fall. The first positive news is the aforementioned rise in stock markets. Confidence in the upcoming easing cycle of the US Federal Reserve only strengthens this optimism. For more than two weeks, short-term interest rate markets have been pricing in a 100% probability that the Fed’s first rate cut will come as early as September. In the past, monetary easing has often served as a catalyst for cryptocurrency gains, but this time, prices have yet to respond.
Another positive sign is the accelerated institutional adoption of Bitcoin. The latest 13F filings (for the quarter ending June 30) show that the number of institutional holders of Bitcoin ETFs has grown to 1,924, up from 1,479 in the first quarter, despite the price drop between April and June, ETF Store President Nate Geraci noted.
Additionally, more public companies are raising capital in the markets to increase their Bitcoin holdings. For example, Bitcoin miner Marathon Digital (MARA) raised $300 million this week through convertible debt and immediately used the funds to buy more than 4,000 bitcoins at a price of about $59,000 each. Medical device company Semler Scientific (SMLR), which announced plans to build a Bitcoin reserve several months ago, received approval from the SEC this week to raise more than $150 million for further token purchases.
So despite the positive signs, the cryptocurrency market continues to plummet, raising questions about what is really driving prices in this market.
