Bitcoin Plunges Below $54,000 Amid Market Selloff and Election Uncertainty
Bitcoin hits its lowest level since February, dropping below $54,000, amid broad crypto market selloff influenced by macroeconomic updates, Jump Crypto’s asset movements, and U.S. election uncertainty.
Bollywood Fever: Bitcoin (BTC) -9.91% plunged to its lowest level since February, while ether traded below $2,400 on Sunday night EST amid a broad crypto market selloff. Investors reacted to various news events, including macroeconomic updates, Jump Crypto’s asset movements, and the increasing odds of Kamala Harris winning the upcoming U.S. election against pro-crypto Donald Trump.
Bitcoin dropped below $54,000 before making a modest recovery to trade at $54,698, according to The Block’s crypto price page. Ether also fell to its lowest level since February, losing 19.45% to trade at $2,333.
Among other top 10 crypto tokens by market cap, BNB dipped 12.88% and XRP dropped 13.38%. The entire crypto market is down 10% in the past day, The Block’s data showed.
“Unlike previous times, this market feels ETH-led, instead of BTC-led,” said Justin d’Anethan, head of APAC business development at crypto market maker Keyrock. “This of course comes as ETH ETF trade and large investors unwind their ETHE (Grayscale ETH Fund) positions.”
Min Jung, an analyst at Presto Research, attributed the decline in bitcoin and ether to several factors. “First, the payroll numbers released last Friday were significantly lower than expected, with only 114,000 jobs added. This has heightened recession fears, leading to a 2.43% drop in the Nasdaq and a 1.84% drop in the S&P 500,” Jung added. Additionally, news that Warren Buffett’s Berkshire Hathaway sold nearly half of its Apple Inc. position during Q2 could further pressure the equities market.
Over the weekend, Jump Crypto, the crypto arm of Jump Trading, appeared to move hundreds of millions of dollars worth of crypto assets, including ether and USDT, leading to speculation that the firm might be liquidating its holdings amid a U.S. Commodity Futures Trading Commission investigation. “Jump Trading has been transferring ETH to a centralized exchange amid rumors that they may be forced to exit the crypto business due to a CFTC investigation,” Jung explained.
U.S. Election Uncertainty
The upcoming U.S. presidential election is also causing uncertainty for crypto investors, as U.S. Vice President Harris is seeing growing approval. Decentralized prediction platform Polymarket’s election poll currently predicts that Harris has a 45% chance of winning, up from around 30% when Biden endorsed her as his successor.
While Trump is a strong proponent of crypto, Harris has yet to show comparable support. However, her campaign reportedly added David Plouffe, a former member of the Binance Global Advisory Board and global strategic advisor for Alchemy Pay, to the team’s crypto outreach efforts.
Jeff Dorman, the chief investment officer of crypto asset management firm Arca, wrote on X that more support for Harris is “bad for crypto.” “Even if Democrats are less evil towards crypto, the entire equity and crypto market is favoring a Trump win,” said Dorman.
Jung of Presto noted that the Trump rally is “no longer driving market sentiment,” and that “polls suggest that Harris’s winning odds have hit an all-time high.” Investors are seeking more clarity on the Jump Trading situation, election predictions, and potential dip-buying opportunities.
Keyrock’s d’Anethan mentioned that on a broader time horizon, “the rate environment along with the likelihood of a Trump win” and the impact of Mt. Gox redemptions are factors that continue to weigh down the crypto markets.
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