- Global markets sank into a risk-averse mood Monday, dragging down bitcoin and ether prices.
- Shares of crypto-linked enterprises mirrored the plunge, with miners dropping sharply and Coinbase tumbling 17%.
On Monday, stocks tied to cryptocurrency ventures experienced a sharp downturn as mounting unrest in the Middle East coupled with growing doubts about the global economic outlook pushed bitcoin and ether—the top two digital assets—to their lowest points in several months.
Among the hardest hit was Coinbase (COIN), the major crypto exchange, which saw its shares drop 17%. MicroStrategy, the software firm known for its aggressive bitcoin accumulation strategy and holding over 1% of the total future bitcoin supply, plunged 21%. In Sweden, CoinShares, a prominent crypto asset manager, declined 12%.
Global Economic Factors and Geopolitical Strains Fuel Crypto Sell-Off
Recently released U.S. economic data painted a less optimistic picture of the nation’s economic health, with employment numbers missing forecasts and the unemployment rate edging higher than anticipated. Meanwhile, in the Middle East, tensions escalated after Iran threatened strikes on Israel in retaliation for the assassination of Ismail Haniyeh—the political leader of Hamas—last week in Tehran. The U.S. had labeled Haniyeh a terrorist back in 2018.
Bitcoin, which dominates the market by capitalization, dropped as much as 15% Monday, dipping below the $50,000 threshold for the first time since February. Ether, holding the number two spot, tumbled for a seventh consecutive day, registering its steepest daily decline since May 2021, with losses reaching 22% within 24 hours. The wider crypto market, as tracked by the CoinDesk 20 Index (CD20), tumbled 20% by 13:45 UTC.
Quick Facts: As of early August 2024, Bitcoin’s market cap hovers around $950 billion, while Ether’s sits near $450 billion. The global crypto market has shed approximately 18% of its value in the past week alone.
Worldwide Equity Markets Also Feeling the Heat
Traditional stock indices mirrored the slump seen in crypto, with Japan’s Nikkei 225 plunging over 12%. Europe’s Stoxx 600 dropped 3.3%, while the U.S.-based S&P 500 slid by 3.0%, underscoring the broad risk-averse sentiment sweeping global investors.
Crypto Miners Bear the Brunt Alongside Major Coins
- Marathon Digital (MARA) and Iren (IREN) each lost roughly 11% of their value.
- Hut 8 (HUT) followed a similar decline, dipping about 11%.
- Riot Platforms (RIOT) showed comparatively milder losses, falling 5.6%.
Note: Prices updated as of August 5, 13:54 UTC to reflect most recent market movements.
