Anika Begay
Bitcoin has fallen sharply after a sell-off in major U.S. stock indexes. Bitcoin has been closely correlated with the price movement of the Nasdaq index.
Luca MacGregor | Bloomberg | Getty Images
Cryptocurrencies have tumbled amid global market sell-offs fueled by recession fears.
The price of Bitcoin fell more than 11% on Monday to $52,501.62, according to Coin Metrics. That’s the lowest level since February. It has lost nearly 16% since Saturday.
Ether losses were even steeper. The cryptocurrency fell 15% to $2,321.95, bringing its three-day loss to 23%.
The moves follow a broader market sell-off that began last week, when a weaker-than-expected July jobs report renewed investor fears of a recession. The tech-heavy Nasdaq Composite has entered a correction. Japanese stocks entered a bear market on Monday after falling more than 12% overnight, their worst one-day sell-off since 1987.
Over the weekend, Goldman Sachs raised its recession odds to 25%.
Since Saturday, the value of Bitcoin has fallen by more than 15%.
“Until last Wednesday, everyone thought that inflation was gradually declining and the economy was relatively strong, so the Fed would start cutting rates with a successful soft landing of the economy,” Yuya Hasegawa, a cryptocurrency market analyst at Japanese bitcoin exchange Bitbank. “However, the July U.S. manufacturing PMI and employment report were much weaker than the market expected, and now [investors] They are worried about the possibility of a recession and selling off risky assets.”
“That said… the market has been a little overreacted, given that there is no absolute evidence that the economy is still in recession,” he continued. “We will probably see some recoil this week.”
In addition to economic concerns, cryptocurrency investors have been dealing with selling pressure from Mt. Gox distributions and the diminishing odds of a second Donald Trump presidency in the United States. Polls on Polymarket, an Ethereum-based prediction market platform, show that the gap between Trump and Kamala Harris has narrowed significantly since President Joe Biden dropped out of the race on July 21.
Bitcoin is already down about 20% for the month of August, a typically quiet month for risk assets, and below the $55,000 floor that has supported it for much of the year. If it doesn’t recover, it could be its worst month since June 2022, when it lost about 37%.
Bitcoin continues to post a 23% gain year-to-date.
