The cryptocurrency market suffered a sharp decline on Sunday as Bitcoin (BTC) tumbled below $82,000, wiping out billions in market value. The downturn coincided with losses in U.S. stock futures, driven by escalating trade tensions and renewed inflation concerns.
Bitcoin, which was at $88,000 last week, fell to $81,700, thereby shrinking by 2% in the last 24 hours. Altcoins were more affected, with the likes of Avalanche (AVAX), Polygon (MATIC), Near (NEAR), and Uniswap (UNI) declining by almost 10%. The market capitalization of the overall crypto market declined by $115 billion in a short time, causing investors to get anxious.Â
Ethereum (ETH) dropped to $1,775 and hit the lowest point in nearly four years. Another reason for Ethereum’s decline is the lack of demand for spot ETH exchange-traded funds (ETFs) that have not attracted any inflows since March.
On the other hand, Bitcoin ETFs received more than $1 billion in the first two weeks, signifying that institutional investors are shifting towards BTC from ETH.
The sell-off wasn’t limited to crypto. The S&P 500 and Nasdaq fell 2% and 2.8%, respectively, reflecting investor uncertainty. Crypto-related stocks also took a hit, with MicroStrategy (MSTR) plunging 10% and Coinbase (COIN) dropping 7.7%.
The drop occurs before new tariffs by the United States, which are to commence on the 2nd of April, targeting the auto, pharmaceuticals, and semiconductor industries. Some experts have pointed out that inflation risks may increase, which will affect the market in a negative way.
In this case, institutional capital withdrawal from risk assets affects both the crypto and traditional markets due to increased volatility. Thus, it is still possible to see that the correlation between Bitcoin and equities is still high, and this means that broader economic factors will still affect the price of Bitcoin.
Also Read: Amid Trump Tariff Threats, MicroStrategy MSTR Stock Falls 11%. Is Bitcoin Next?
