After several days of largely calm price activity, cryptocurrencies plunged Thursday afternoon, driving bitcoin (BTC) to its worst level since the early August market panic.
Bitcoin was at $57,700 at press time, down roughly 3% from an hour earlier. Ether (ETH) and solana (SOL) fell much more. The CoinDesk 20 Index fell 3% in 24 hours.
Summer 2024 saw two dramatic dips, the first over the U.S.'s July 4 holiday. A German government body began selling the first of its 50,000 bitcoins confiscated in a criminal investigation, sparking that selloff. Two weeks ago, a seemingly modest rate rise by the Bank of Japan caused a worldwide equities market crash that extended to all risk assets, including crypto.
The cause of today's selloff is unclear. US stock markets are again rising, with the Nasdaq up 2.4% and the S&P 500 up 1.6%, returning to pre-August levels.
Bulls may be frustrated as favorable triggers keep coming in, but prices aren't reacting. First catalyst is the stock market surge.
The stock market boom is partly due to a likely U.S. Federal Reserve easing cycle. For almost two weeks, short-term interest rate markets have priced in a 100% possibility of a September Fed rate drop. While earlier monetary easing initiatives have benefited crypto, prices have not responded this cycle.
Institutional bitcoin adoption has accelerated, another favorable factor. According to ETF Store President Nate Geraci, 1,924 institutional investors of spot bitcoin ETFs were included in the latest 13F filings for the quarter ending June 30. Geraci said that's up from 1,479 in the first quarter despite falling prices in April-June.
The number of public corporations using capital markets to buy bitcoin is growing. Marathon Digital (MARA), a bitcoin miner, obtained $300 million in convertible debt last week and used it to acquire more than 4,000 bitcoins for $59,000 apiece. Semler Scientific (SMLR), which disclosed its bitcoin treasury plans months ago, gained SEC clearance this week to fund more than $150 million to acquire more tokens.
