Bitcoin (BTC) fell to its lowest level since February, dropping below $54,000 before stabilizing at $54,698. Ether (ETH) also saw a significant decline, trading below $2,400 and hitting a low of $2,333, its lowest since February. The broader crypto market experienced a selloff, driven by multiple factors including macroeconomic news, Jump Crypto’s asset movements, and increasing speculation surrounding the U.S. election.
The selloff comes as investors react to a variety of news events. Bitcoin and ether’s drop is part of a wider trend affecting the top 10 cryptocurrencies, with BNB falling 12.88% and XRP down 13.38%. Overall, the crypto market has lost 10% in the past 24 hours, according to data from The Block.
Justin d’Anethan, head of APAC business development at crypto market maker Keyrock, noted that this market downturn appears to be led by Ethereum rather than Bitcoin. “This market feels ETH-led, especially with the ETH ETF trade and significant unwinding of ETHE (Grayscale ETH Fund) positions,” d’Anethan explained.
Presto Research analyst Min Jung attributed the declines to several factors. “The lower-than-expected payroll numbers from last Friday, with only 114,000 jobs added, have raised recession concerns. This contributed to a 2.43% drop in the Nasdaq and a 1.84% decline in the S&P 500,” Jung said. Additionally, news that Warren Buffett’s Berkshire Hathaway sold nearly half of its Apple Inc. holdings during the second quarter could be adding further pressure on the equities market.
Global stock market sell-offs are also becoming more widespread. Japan’s Nikkei 225 and Topix indices plunged around 7% in the morning session, approaching bear market territory, following the Bank of Japan’s recent interest rate hike to 0.25%.
Compounding these issues, Jump Crypto, a division of Jump Trading, has been moving hundreds of millions of dollars worth of crypto assets, including ether and USDT. Speculation is rife that this could indicate a liquidation of holdings due to a U.S. Commodity Futures Trading Commission (CFTC) investigation. “Jump Trading has been transferring ETH to centralized exchanges amid rumors of a potential exit from the crypto business due to the CFTC probe,” Jung added.
The U.S. presidential election also adds to market uncertainty. Vice President Kamala Harris has seen rising approval ratings, which impacts crypto investors’ sentiment. Polymarket’s election poll currently gives Harris a 45% chance of winning, up from around 30% when President Biden endorsed her as his successor. While Trump is a known supporter of crypto, Harris has not matched his stance on the industry. However, Harris’s campaign has recently added David Plouffe, a former Binance Global Advisory Board member, to bolster their crypto outreach efforts.
Jeff Dorman, chief investment officer of crypto asset management firm Arca, argued that increased support for Harris could be detrimental to crypto. “Even if Democrats are less hostile towards crypto, the market currently favors a Trump win,” Dorman wrote on X.
Jung observed that “the Trump rally is no longer driving market sentiment” and that “polls suggest Harris’s winning odds are at an all-time high.” Investors are awaiting more clarity on the Jump Trading situation, election predictions, and potential opportunities for dip-buying at current levels. Keyrock’s d’Anethan also highlighted that broader factors, such as the rate environment and the likelihood of a Trump win, alongside ongoing Mt. Gox redemptions, are adding pressure to the crypto markets.
