Black Monday Trends as Risky Assets Like Stocks and Cryptocurrencies Plunge

In Japan, the Nikkei 225 and Topix indices, which hit their all-time high earlier this year, moved into a bear market, falling by over 20% from the YTD high.

Risky assets like stocks and cryptocurrencies crashed on Monday as investors rushed to safety amid a sell-off in the financial markets.

In Japan, the Nikkei 225 and Topix indices, which hit their all-time high earlier this year, moved into a bear market, falling by over 20% from the YTD high.

The same trend was happening in other markets in Asia, Europe, and the United States. Dow Jones, S&P 500, and Nasdaq 100 futures all dropped by over 250, 65, and 400 points, respectively. In Europe, the DAX, CAC 40, and FTSE 100 indices were down by over 1%.

A sea of red has also engulfed the crypto market, with Bitcoin crashing for five days straight and reaching a low of $52,386 on Monday morning. It has dropped by over 26% from its highest level this year.

Ethereum and other altcoins have done much worse, with most of them falling by over 10% in the past 10 years.

Among them, STEPN’s GMT fell by 17%, NEAR Protocol’s NEAR dropped by 15%, and THORChain’s RUNE lost over 13%.

Peter Schiff warns on Bitcoin ETFs liquidations

Amid this sell-off, there are fears that Bitcoin ETFs will have a 15% down gap when the market opens on Monday. Unlike Bitcoin which trades on a 24/7 basis, these ETFs trade like stocks and are open Monday to Friday. As such, they tend to be highly volatile on Monday as they consider weekend events.

In an X post on Sunday, Peter Schiff, a well-known crypto skeptic warned that the sell-off would trigger mass ETF liquidations as investors rushed out. He also warned of a potential crypto black Monday, which seems to be happening.

#Bitcoin just sank below $58K. If it takes out it's July low by tomorrow's U.S. #StockMarket open, #BitcoinETFs will gap down by more than 15%, 30% below their Jan. highs. A loss of that magnitude may finally trigger mass ETF liquidations. If so, brace for a #Crypto black Monday.

Crypto liquidations have jumped sharply in the last 24 hours. Data by CoinGlass shows that tokens worth over $802 million have been liquidated as most traders. Most of the liquidations happened in Ethereum ($296 million) followed by Bitcoin ($238 million), and Solana ($37 million).

Peter Schiff has always been bearish on Bitcoin, which he believes is a worthless asset. Instead, he has maintained a bias towards gold. His prediction about gold has been accurate this year as it has remained above $2,440 and is sitting near its all-time high.

However, in the long run, Bitcoin has done better than gold by far. As shown above, Bitcoin price has risen by over 360% in the past five years while gold is up by less than 80% in the same period. BTC is also up by 23% this year while gold has risen by less than 20%.

Still, there are two potential positive catalysts in the crypto industry. First, the ongoing crash is not an isolated event, with other assets being in a strong freefall. In most cases, as we saw in 2020, 2022, and 2009, stocks tend to bounce back over time, something that will benefit digital currencies.

Second, the ongoing crash, coupled with the weakness in the US economy could trigger a Fed intervention. Some analysts are calling for the Fed to deliver a jumbo rate cut, as we saw during the Covid-19 pandemic. If that happens, then more money could start moving to riskier assets like stocks.

The above is the detailed content of Black Monday Trends as Risky Assets Like Stocks and Cryptocurrencies Plunge. For more information, please follow other related articles on the PHP Chinese website!