Cryptocurrencies were battered hard by a wave of risk aversion in global markets on Monday, with Bitcoin (BTC), the world’s largest cryptocurrency, slumping below the $50,000 mark for the first time since February. The crash comes as increasing tensions in the Middle East and concerns about the soundness of the global economy ate into investor confidence.
Total liquidations in the last 24 hours have surged to $1.23 billion, with longs accounting for $994.82 million of the wipeout, as per CoinGlass data.
Bitcoin Not To Blame For Crypto Bloodbath
Bitcoin tumbled below $60,000 on Sunday, then nosedived to $49,221 lows on Monday morning as investors exited risk-on assets. BTC is down nearly 12% over the past 24 hours, recovering to $54,375 as of press time. Ethereum (ETH) fell 17.5% to $2,171, registering its biggest single-day fall since 2021.
In a Monday report, analysts at research and brokerage firm Bernstein noted that the crypto-wide crash was “not Bitcoin’s fault this time”. Bernstein attributed the ongoing market meltdown to “fears in equity markets” and broader economic concerns rather than Bitcoin-specific headwinds.
Amid the sell-off, Bernstein remains upbeat about the long-term prospects of the alpha crypto:
“We don’t see any incremental negatives for crypto here. Bitcoin’s institutional adoption trends — ETF inflows and wirehouse/bank approvals remain on track,” the broker wrote.
Bernstein observes that institutional involvement in the crypto space has steadily grown this year, with spot Bitcoin exchange-traded funds (ETFs) enjoying inflows surpassing $17 billion year-to-date.
Bernstein strategists also highlight recent approvals from major financial institutions.
As ZyCrypto reported last week, Morgan Stanley announced it would start allowing its financial advisers to pitch spot Bitcoin ETFs to their wealthy clients from August 7.
“We expect more wirehouse approvals into Q3 and Q4, thus providing further on-ramps for asset allocation to Bitcoin,” Bernstein continued.
2024 US Elections: A Potential Short-Term Catalyst For Bitcoin
Bernstein analysts further cited the U.S. presidential election as a key short-term catalyst for crypto prices. They note that “Bitcoin remains a ‘Trump trade,’” with crypto markets generally preferring Trump as a pro-crypto candidate.
“We expect Bitcoin and crypto markets to be range-bound until the U.S. elections, trading off catalysts such as presidential debate and the final election outcome.”
Overall, the broker believes crypto will respond to macro and election cues throughout the third quarter. However, they expect that if broader stock markets rebound strongly after a Federal Reserve response, Bitcoin and crypto markets will move in concert.
