How Japan’s Stock Market Crash Affects Crypto Prices 💱

Global financial markets are in turmoil, with the crypto sector also affected. South Korea's stock market has plunged by 4%, and Japan is facing its worst two-day drop in history, surpassing the Black Monday crash of 1987. This steep decline raises concerns about a potential larger crash affecting global cryptocurrency market.

The NASDAQ is now in correction territory, and the S&P 500 is approaching it, with volatility doubling in just a month. Many top stocks have fallen 20% from their highs. Bitcoin is enduring its worst week since the FTX collapse, and the broader crypto market is crashing. Recession fears are mounting in the U.S., with the Federal Reserve anticipated to cut rates three times by the end of the year.

In Japan, the Nikkei and TOPIX indices have experienced their worst losses since 1987, both falling over 8% and dropping around 20% from their all-time highs. Major trading houses like Mitsubishi, Mitsui & Co., Sumitomo, and Marubeni have all seen declines of about 10%. This downturn was triggered by the Japanese central bank’s decision to raise interest rates and reduce government bond purchases.

In South Korea, panic selling has led to a halt on all sell orders, indicating widespread investor fear and uncertainty.

On Monday, the Japanese yen fell to its lowest level against the US dollar since January 2024. The previous strength in Japanese stocks was partly due to a weaker yen, but as the yen reverses, investors are exiting the market. Warren Buffett's decision to sell more stocks last quarter indicates growing market concerns. The recent surge in crypto prices attracted new investors, but as the market reverses, these positions are being liquidated, exacerbating the downward momentum.

Bitcoin has dropped 17% to $50,350 from its high of $70,000, leading to a $1.04 billion loss in the crypto market within 24 hours. This interconnected global financial turmoil is creating instability as investors and analysts await signs of stabilization.

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