Crypto selloff wipes out $270 billion in value as bitcoin, ether plunge

The cryptocurrency market plunged on Sunday, shedding around $270 billion in value over a 24-hour period. Bitcoin and ether each saw dramatic drops as investors sold out of risky assets.

The slide comes after the Nasdaq wrapped up its worst three-week stretch in two years. The cryptocurrency market plummeted in value on Sunday, as investors continued selling out of risky assets. Led by a drop of 11 per cent in bitcoin in the past 24 hours and a 21 per cent plunge in ether, the overall value of cryptocurrencies sank by about $270 billion, according to CoinGecko data.

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The selloff in the crypto market coincided with a broader slide in equities in Asia-Pacific markets. Japan’s Nikkei 225 dropped as much as 7 per cent, extending losses that began last week, after the Bank of Japan announced it would hike its benchmark interest rate to the highest level in 16 years.

In the US the Nasdaq slid 3.4 per cent last week into correction territory, capping off the tech-heavy index’s worst three-week stretch since September 2022, when the market was in freefall. Amazon and Nvidia contributed to the declines.

Last week’s drop in stocks was tied in part to disappointing earnings, a weaker-than-expected jobs report, higher unemployment and a declining manufacturing sector. The US Federal Reserve opted to hold its benchmark rate steady and didn’t promise a rate cut in September, which many market experts had baked into their forecast.

Lower interest rates tend to correlate with better performance for risky assets. Bitcoin’s price has reached its lowest level since February. The world’s largest cryptocurrency is trading at about $54,000. It’s still up almost 23 per cent this year. The price of ether, the native token underpinning the ethereum blockchain, fell to around $2,300 and has erased its gains for the year.

Binance’s BNB token was down more than 15 per cent and solana is trading 10 per cent lower. Investors are also looking out for new trade data from China and Taiwan this week, as well as central bank decisions in both India and Australia.

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The latest crypto wipeout will be felt by a broader base of investors after the SEC this year approved new spot exchange-traded funds for bitcoin and ether. The ETFs have seen hundreds of millions of dollars flow into the coins. On Friday, CNBC reported that Morgan Stanley would soon allow its 15,000 financial advisors to pitch bitcoin ETFs to its clients, a first for Wall Street.