Crypto Market Crash: Over 290,000 Liquidations, $855 Million in Losses, US Stocks Wobble

Crypto Market Crash: Over 290,000 Liquidations, $855 Million in Losses, US Stocks WobbleFebruary 24, 2024 saw significant volatility in global financial markets. The cryptocurrency market experienced a flash crash in the early hours, with Bitcoin plunging below $92,000 and Ethereum falling below $2,500, triggering widespread panic and resulting in over 290,000 liquidations totaling $855 million in losses

Crypto Market Crash: Over 290,000 Liquidations, $855 Million in Losses, US Stocks Wobble

February 24, 2024 saw significant volatility in global financial markets. The cryptocurrency market experienced a flash crash in the early hours, with Bitcoin plunging below $92,000 and Ethereum falling below $2,500, triggering widespread panic and resulting in over 290,000 liquidations totaling $855 million in losses. Simultaneously, US stock indices showed mixed performance, with tech and Chinese stocks generally declining, reflecting a subdued market sentiment.

Crypto Market Flash Crash: Heavy Losses

In the early hours of February 24 (Beijing time), the cryptocurrency market suffered a sudden and sharp downturn. Bitcoin dropped over 4%, while Ethereum plummeted more than 11%. Other major cryptocurrencies, including SOL, XRP, and Dogecoin, also experienced significant declines, falling over 16%, 11%, and 13%, respectively. CoinGlass data revealed that over 290,000 liquidations occurred across the market in the past 24 hours, amounting to a staggering $855 million. This crash intensified concerns about the stability of the cryptocurrency market.

One potential trigger for the crash may be the impact of the recent hack on the Bybit exchange. On the evening of February 21, Bybit was compromised, resulting in losses exceeding $1.5 billion (approximately 10.8 billion RMB), including over 400,000 ETH and stETH. This unprecedented attack severely undermined confidence in the cryptocurrency market. Furthermore, the South Dakota legislature's postponement of a vote on a bill that would have allowed the state to invest in Bitcoin likely contributed to the negative market sentiment. The delay effectively killed the bill, which proposed "allowing state-level investment in Bitcoin," further exacerbating market uncertainty.

US Stock Market Wobbles: Tech and Chinese Stocks Decline

Concurrently with the cryptocurrency crash, the US stock market exhibited a volatile pattern. The Dow Jones Industrial Average rose 0.08% to close at 43,461.21; the Nasdaq Composite fell 1.21% to close at 19,286.92; and the S&P 500 dipped 0.50% to close at 5,983.25.

The technology and consumer discretionary sectors led the decline, falling 1.43% and 0.87%, respectively. The healthcare and financial sectors, however, showed gains of 0.75% and 0.45%. Chip stocks generally fell, with the Philadelphia Semiconductor Index closing down 2.59%. NANO-X Imaging slumped over 8%, Micron Technology dropped over 3%, and Qualcomm, AMD, and Intel all fell over 2%. Tesla closed down 2.15%, following a prediction by its major shareholder, Elon Musk, of a 50% drop in Tesla's stock price by 2025. Nvidia closed down 3.09%, ahead of its earnings report this Wednesday. Microsoft fell 1.03% after brokerage firm TD Cowen reported that Microsoft had canceled some US data center leases and reduced overseas spending. Microsoft responded by stating that its $80 billion capital expenditure plan for the fiscal year remains unchanged.

Chinese stocks listed on US exchanges also generally declined, with the Nasdaq Golden Dragon China Index falling 5.24%. Alibaba dropped over 10%, its largest single-day decline since 2022. Alibaba announced plans to invest at least 380 billion over the next three years in building cloud computing and AI infrastructure. Baidu also released a newly upgraded version of its app, integrating multiple AI features. Several other Chinese stocks, including Bilibili, FUTU Holdings, Pinduoduo, JD.com, and New Oriental, all fell over 7%.

Apple's Massive Investment: $500 Billion in US Expansion Over Four Years

In contrast to the overall pessimistic market sentiment, Apple announced a $500 billion investment in its US operations over the next four years. This includes building a new server manufacturing plant in Houston, a supplier academy in Michigan, and additional spending with existing US suppliers. This is Apple's largest investment ever, and the company said it would create 20,000 new jobs and boost the production of AI servers. The move is also seen as an attempt to secure tariff relief from the Trump administration and a response to calls from the Trump administration to shift production facilities from Mexico to the US.

Berkshire Hathaway's Strong Performance: Operating Profit Up 71.34% Year-over-Year

Berkshire Hathaway released its 2024 annual report, showing operating profits of $14.53 billion in the fourth quarter, a 71.34% year-over-year increase, and full-year operating profits of $47.437 billion. Its Class B shares closed up 4.2%, their best single-day performance since November.

Gold Hits Record High: Safe-Haven Demand Drives Price Up

In the commodities market, spot gold rose 0.53% to $2,951.50 an ounce, reaching a high of $2,956.15 during the session, a record high. COMEX gold futures closed up 0.53% at $2,968.9 an ounce, a record closing high. Investor concerns about the disruptive potential of Trump's trade and geopolitical agenda are driving demand for gold as a safe-haven asset. Goldman Sachs last week raised its year-end gold price target to $3,100 an ounce.

Summary:

February 24th presented a complex and volatile picture for global financial markets. The cryptocurrency market crash, the US stock market's wobble, and the widespread decline in Chinese stocks all reflect market uncertainty and risk. Apple's massive investment and Berkshire Hathaway's strong performance, however, offered some positive signals. The continued rise in gold prices indicates strong investor demand for safe-haven assets. Future market direction remains uncertain, and investors should closely monitor market developments and make cautious decisions.