🌎 Crypto Market Loses $500 Billion in 24 Hours

The crypto market is expected to experience increased volatility in the coming weeks due to key macroeconomic developments driving a risk-off sentiment among investors.

Massive Market Losses

The global crypto market has lost over $500 billion in the last 24 hours, with its total market capitalization plummeting from $3.1 trillion to $2.6 trillion.

This sharp reversal, according to analysts, was a “colossal retail trap” that hit bullish traders hard, as crypto funds saw a record $2.6 billion outflow in late February.

Bitcoin and Ethereum Take a Hit

Bitcoin (BTC) dropped 3% below its pre-announcement level and shed nearly $250 billion in market capitalization over the past 12 hours. Ethereum (ETH) slid to $2,002, down 8% from its earlier rebound.

Escalating Trade Tensions

The recent U.S. tariff announcement on Canada and Mexico, combined with China’s retaliatory measures, has led to increased trade tensions and economic policy uncertainty. This has resulted in a global move towards the risk-off trade, causing all risky assets to fall.

“The real driver here is the GLOBAL move towards the risk-off trade. As trade war tensions rise and economic policy uncertainty broadens, ALL risky assets are falling.”

Crypto No Longer a Safe Haven

Analysts believe that investors have lost confidence in Bitcoin as a safe haven asset and are instead opting for Gold. Since January 1, the price of Gold has increased by 10%, while the price of BTC dipped nearly 10% over the same period.

Tips for Investors

Be prepared for increased volatility in the coming weeks.
Diversify your portfolio to minimize risks.
Keep an eye on macroeconomic developments and trade tensions.

Expert Insights

Matt Mena, Crypto Research Strategist at 21Shares, believes that the market reaction to the tariffs may have been an overreaction. He expects to see some degree of stabilization when trading resumes and remains optimistic about the long-term outlook for the crypto sector.