Market Turmoil Sends Bitcoin to $66,000, Altcoins Down as Much as 15% in Widespread Risk-Off Trading
Crypto Markets Rocked by Steep Selloff as Geopolitical Risks Flare
The cryptocurrency market suffered a broad and punishing selloff on Friday, with bitcoin plunging below $66,000 and altcoins seeing double-digit percentage losses as investor risk appetite was battered by rising geopolitical tensions.
Bitcoin, the largest cryptocurrency by market cap, tumbled over 5% on the day to trade around $66,700 as of late afternoon in the U.S. The sell-off saw bitcoin fall from around $71,000 earlier in the session. Ethereum took an even bigger hit, plummeting as much as 12% to $3,100 before paring some losses.
The carnage was particularly severe among altcoins, with the CoinDesk 20 index sinking nearly 10%. Several major altcoins like Cardano’s ADA, Avalanche’s AVAX, Bitcoin Cash, Filecoin and Aptos plunged between 15-20%.
The crypto market rout triggered the largest forced liquidation of leveraged trading positions in over a month. An estimated $850 million worth of crypto derivatives bets were unwound, with over $770 million of those being long positions betting on rising prices.
The precipitous drop in digital asset prices coincided with a risk-off move in traditional markets fueled by heightened geopolitical risks. U.S. officials warned of potential Iranian plans for a significant attack on Israel, sparking safe-haven flows.
The S&P 500 and Nasdaq 100 stock indices shed around 1.7% while treasury bonds and the U.S. dollar rallied as a hedge. Gold prices vaulted above $2,400 per ounce to hit a new all-time high before pulling back.
While anticipating some short-term market softness for cryptocurrencies due to tax season, investment firm Ryze Labs maintained a relatively optimistic long-term outlook. The firm expects central bank policy adjustments down the road to provide relief for risk assets like crypto.
The violent market shakeout underscored once again the challenges for investors in navigating the volatility and influence of broader macroeconomic and geopolitical forces on the nascent crypto asset class.
