Bitcoin dips below $60k, and altcoins tumble as the overall market slumps.
Bitcoin dominance rises despite losing 10% of its value in a week.
Crypto earnings mixed: Coinbase went down, and Tether’s profits surged.
Aug. 5 began with a shockwave across global financial markets, recording some of the most enormous losses in decades.
The crypto market wasn’t spared, experiencing its most significant single-day drop since 2023. Major assets like Bitcoin and Ethereum suffered double-digit declines, while many altcoins plummeted to their yearly lows.
Liquidations across the market exceeded $1 billion and were still climbing at the time of writing.
According to CoinGlass, the market flushed nearly $1.14 billion in liquidations, with $857 million in long positions and $281 million in short positions. Bitcoin led this liquidation trend, with $450 million in long positions wiped out, followed closely by Ethereum, with $344 million in positions erased.
This sell-off wiped out nearly $600 billion from the market cap, bringing it down to $1.93 trillion at press time.
The market turbulence comes as a surprise. Just a week ago, Bitcoin soared to a seven-week high of $70,000, fueled by optimistic statements from figures like Donald Trump, SenatorLummis, andMichael Saylor at aBitcoin conference in Nashville.
Experts attribute the crypto market’s bloodbath to several factors, including dwindling crypto earnings reports, worsening global economic conditions, escalating geopolitical tensions, and retail investor panic.
Q2 Crypto Earnings: Coinbase and MSTR Down, Tether Profits Surge
In Q2 2024, major crypto firms reported mixed earnings amid fluctuating market conditions.
Coinbase’s revenue dropped to $1.38 billion from $1.58 billion in Q1 but saw increased transactions on its Base network and a 17% rise in subscription and services revenue due to higher USDC balances. Despite the revenue drop, its stock rose by 5%.
Marathon Digital’s revenue surged by 78% to $145.1 million, but it faced a net loss of $199.7 million, partly due to selling over half the Bitcoin mined to cover costs.
MicroStrategy reported a net loss but continued buying Bitcoin, adding 12,222 Bitcoins to its holdings, worth nearly $14.7 billion at the time of writing.
In stark contrast, Tether bucked the trend by achieving record profits of $1.3 billion in Q2 despite slowing its Bitcoin purchases, ending with a balance of $4.73 billion.
The mixed earnings report from these major crypto firms likely played a factor in the crypto market’s decline.
Market Tumbles on Poor Jobs Report; CFTC Investigates Jump Trading
Following a disappointing July jobs report, the stock market faced one of the worst days in years, marked by its largest single-day sell-off since 2022.
JUST IN: Over $2.9 trillion has been wiped out from major indices and stocks this morning due to growing fears of a global recession.
This is the worst day for stocks since March 16, 2020, during the COVID-19 pandemic fears. pic.twitter.com/qIPu7xiz5X
The Nasdaq and Dow Jones indices tumbled by 2.3%, with tech stocks hit hardest—Amazon plummeted 11%, and Intel fell a staggering 25%.
Making matters worse, the Bank of Japan’s rate hike sent shockwaves through Asian markets, causing the Nikkei and other markets, such as Europe and Taiwan, to plummet in their worst decline in decades.
This global market rout did not shy away from extending into the crypto sector, dragging down Bitcoin and many altcoins into significant losses.
Jump Crypto: The Black Swan?
Recently, Jump Crypto unstaked nearly $200 million worth of Ethereum and transferred it to exchanges, raising concerns about the firm’s liquidity and potential margin call issues. This move triggered over $350 million in liquidations across Ethereum-based DeFi platforms.
Adding to the uncertainty, the US Commodity Futures Trading Commission (CFTC) isinvestigating Jump Trading. While the investigation does not imply wrongdoing, it’s unclear if any charges will follow.
Jump Trading, a long-time player in the crypto space, has been involved in several contagion events, including the Wormhole bridge hack, the Terra-Luna collapse, and the FTX fiasco. Some experts speculate that the firm might be exiting the crypto market, pointing to its recent liquidation activity.
