The cryptocurrency market experienced a significant setback on Sunday, as Bitcoin (BTC) fell below $82,000, wiping out billions in market capitalization. This decline coincided with a broader downturn in U.S. stock futures, driven by escalating trade tensions and growing concerns over inflation.
Bitcoin, which stood at $88,000 just a week ago, dropped to $81,700, representing a 2% decrease within 24 hours. Meanwhile, altcoins suffered even heavier losses, with Avalanche (AVAX), Polygon (MATIC), Near (NEAR), and Uniswap (UNI) all experiencing declines of nearly 10%. In total, the cryptocurrency market capitalization shrank by $115 billion, causing anxiety among investors.
Ethereum (ETH) fell to $1,775, marking its lowest point in almost four years. One of the contributing factors to Ethereum’s struggles is the lack of demand for spot ETH exchange-traded funds (ETFs), which have not seen any inflows since March. In contrast, Bitcoin ETFs attracted over $1 billion in investments in the first two weeks of the month, indicating that institutional investors are increasingly favoring BTC over ETH.
The cryptocurrency sell-off mirrored declines in traditional markets, with the S&P 500 and Nasdaq falling 2% and 2.8%, respectively, as investor sentiment grew uncertain. Crypto-related stocks also saw substantial drops, with MicroStrategy (MSTR) falling 10% and Coinbase (COIN) losing 7.7%.
The downturn comes just before the United States is set to implement new tariffs on April 2, targeting industries such as automotive, pharmaceuticals, and semiconductors. Experts have raised concerns that these tariffs could further drive inflation, negatively impacting both traditional and crypto markets.
Institutional investors are withdrawing capital from risk assets due to rising volatility, which is influencing both the crypto and traditional markets. This underscores the continued strong correlation between Bitcoin and equities, highlighting the ongoing impact of broader economic factors on the cryptocurrency market.
Related topics:
BlackRock and Fidelity Set to Enter the XRP ETF Market: Nate Geraci
Hyperliquid to Refund JELLY Traders, Enhances Risk Management Strategy
GameStop Shares Drop 25% Following Bitcoin Investment Announcement