Global Risk Aversion Heats Up, Crypto Market Suffers Major Blow: Bitcoin Plunges Below $50,000, ETFs Dive Over 25%

Global Risk Aversion Heats Up, Crypto Market Suffers Major Blow: Bitcoin Plunges Below $50,000, ETFs Dive Over 25%As of 5pm on August 5th, the cryptocurrency market has been hit hard by the global risk aversion sentiment. Bitcoin prices have fallen below the $50,000 mark, hitting a new low since February this year, with a 12

Global Risk Aversion Heats Up, Crypto Market Suffers Major Blow: Bitcoin Plunges Below $50,000, ETFs Dive Over 25%

As of 5pm on August 5th, the cryptocurrency market has been hit hard by the global risk aversion sentiment. Bitcoin prices have fallen below the $50,000 mark, hitting a new low since February this year, with a 12.86% drop in the past 24 hours. Other major cryptocurrencies have also seen declines, with Ethereum falling below $3,000 and Binance Coin dropping over 15%. A significant amount of capital has flowed into the stablecoin USDT seeking safe haven, reaching a trading volume of $74.134 billion in the past 24 hours.

The sharp price fluctuations have led to an explosion in the number of liquidations in the market. Data from coinglass shows that 279,300 users liquidated positions in the past 24 hours, totaling $1.068 billion. Among these, long positions accounted for $9.07 billion, while short positions accounted for $1.61 billion. The largest single liquidation occurred on Huobi-BTC, valued at $27 million.

The blow to cryptocurrencies has also affected related ETFs. In the US market, Bitcoin ETFs have seen a widespread decline in price, with a net outflow of $237 million on August 2nd. Ethereum spot ETFs saw a net outflow of $54.3 million, with pre-market prices down by around 3.8%. ETFs in the Hong Kong market suffered even larger losses on August 5th. At closing, Bosera Ethereum, Huaxia Ethereum, and GF Ethereum plunged over 25%, GF Bitcoin and Huaxia Bitcoin fell over 17%, and Bosera Bitcoin dropped close to 15%, all hitting their largest declines since listing and reaching their lowest prices since listing.

This crash in the cryptocurrency market is closely related to the growing trend of risk aversion across global assets. Last week, the three major US stock indices closed down, with the Nasdaq down 2.43%, the S&P 500 down 1.84%, and the Dow Jones down 1.51%. Asia-Pacific markets experienced a "Black Monday." On August 5th, the Nikkei 225 index closed down 12.4%, settling at 31,458.42 points, erasing all gains for the year. The Nikkei 225 futures were suspended twice during the day due to circuit breakers. The KOSPI index and the KOSDAQ index, both in South Korea, plunged 8% before triggering circuit breakers and suspending trading for 20 minutes.

The main driver behind this market sentiment is a series of disappointing economic data from the United States. The latest data shows that the US ISM manufacturing PMI for July was 46.8, a new low since November 2023, compared to an expectation of 48.8 and a previous reading of 48.5. The US non-farm payroll employment for July fell sharply from 179,000 to 114,000, significantly lower than the expected 175,000, with the unemployment rate rising to 4.3%, the highest level in three years. The Federal Reserve's latest interest rate decision saw it maintain rates unchanged for the eighth consecutive time, with the market believing the Fed's rate cuts are too slow, leading to an increased risk of a hard landing for the US economy and triggering widespread risk aversion.

Most of the "Big Seven" tech stocks in the US market declined, with Amazon, Tesla, Microsoft, and Google all suffering consecutive weekly losses. Amazon and Nvidia saw their market capitalizations evaporate by approximately trillions of yuan.

This blow to the cryptocurrency market undoubtedly intensifies investor concerns about the digital currency market. While risk aversion is unlikely to dissipate in the short term, the cryptocurrency market possesses strong resilience, and its long-term value remains promising. It's worth noting that as regulatory policies continue to improve, the digital currency market will move towards more regulated and healthier development.