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CoinDesk
Bitcoin Tumbles to $53K, Ether Turns Negative for 2024 as Panic Grips Markets
By Stephen Alpher,
20 hours ago
A broad weekend selloff in crypto accelerated during Sunday evening U.S. hours, sending bitcoin {{BTC}} plunging to levels not seen since February and ether {{ETH}} back to prices not seen since December.
Bitcoin is lower by 12% over the past 24 hours and 20% on a week-over-week basis. Now down 21% over the past 24 hours and 30% over the past week, ether {{ETH}} has given up the entirety of its year-to-date gain, and is off by roughly 3% since Jan. 1.
The trigger for what's now become a massive correction in crypto and traditional markets just might have been the Bank of Japan, which last week hiked its benchmark interest rate . That monetary tightening sent the yen shooting higher and the country's Nikkei stock index tumbling. Down another 6% early Monday, the Nikkei is now lower by roughly 15% over the past three sessions and 20% from a mid-July peak.
The action in Japan spread to the U.S., where the Nasdaq slid more than 5% in last week's final two sessions. Nasdaq futures are lower by 2.5% in Sunday evening action.
In addition to the Bank of Japan's somewhat unexpected hawkishness last week, the U.S. Federal Reserve also surprised a few – not by holding rates steady, but instead by appearing somewhat ambivalent about cutting rates in September, which nearly all market participants assumed was a sure thing.
Whether the Fed made a policy error remains to be seen, but markets are setting their own agenda at the moment. Traders have priced in a 100% chance of lower U.S. base rates in September, with a 71% chance of 50 basis points in rate cuts and just a 29% chance of a 25 basis point move.
Looking further out on the maturity curve, the U.S. 10-year Treasury yield has tumbled to 3.75% on Sunday evening versus 4.25% just one week ago and a full 150-175 basis points less than the current fed funds target of 5.25%-5.50%.
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