What Caused The Crypto Market Crash

What Caused The Crypto Market Crash?

As of May 30, 2024, the overall market capitalization of cryptocurrencies fell to $2.51 trillion, indicating a slump in the sector. Over the past day, the market volume has decreased by 9.22%. The largest cryptocurrency, Bitcoin, is presently trading at $67,659, down 0.22% over the last 24 hours and 2.82% over the previous seven days. The second-largest cryptocurrency, Ethereum, is currently trading at $3,732, down 2.06% over the previous seven days.

Because of investor anxiety following Mt. Gox's $9 billion bitcoin transfer and the decline in U.S. spot bitcoin ETF inflows, the cryptocurrency market is down today.

 

Since investors are progressively adjusting to the possibility that the U.S. central bank may not lower rates at all this year, cryptocurrency market analysts do not anticipate that the Federal Market Committee (FOMC) will alter interest rates.

The net outflow from the 11 Spot Bitcoin ETFs as of May 1, 2024, was approximately $563.7 million, the highest since the funds started trading on January 11. As per CoinGlass, the data source, this prolonged a losing run that lasted for five days. Since April 2024, investors have withdrew about $1.2 billion from the ETFs. Remarkably, this month saw the first-ever withdrawal from BlackRock's iShares Bitcoin Trust (IBIT), with close to $36.9 million leaving the fund.

Furthermore, Fidelity's FBTC caused withdrawals totaling $191.1 million. Bulls may be in a panic since BlackRock's IBIT and FBTC consistently pulled in money throughout the first quarter, more than offsetting the consistent huge withdrawals from the more expensive Grayscale ETF (GBTC).

In summary 

It's a good decision to keep a close eye on the cryptocurrency market given the unstable global macroeconomic conditions and delayed rate of recovery.

This is an excellent moment to watch and study the market, so don't take any hasty judgements. It's possible that once the chaos situation totally diffuses, investors will use the observation to assist them make wise selections and possibly even acquire a favourite digital asset at a fair price.