Why is the Crypto Market Down Today? Here are the Details
- Significant outflows from Bitcoin and Ethereum ETFs contribute to the crypto market's bearish trend in September 2024.
- A major hack on the Penpie platform creates fear and uncertainty within the crypto community.
- Losses recorded by Nvidia stock impact AI-based tokens, adding to the overall market decline.
Crypto Market: Why is Crypto Crashing Today?
September 2024 doesn't seem a good start for the crypto market, reflecting a bearish month not just for crypto but across all asset classes. After holding a strong bullish market in October, the crypto market is showing a downtrend, mainly in terms of Bitcoin (BTC) and Ether (ETH).
A sudden plunge in BTC price by 4.20% and ETH price by 5.26% made the crypto community think about why the crypto market is down today. Additionally, Charles Hoskinson's (Cardano founder) recent statement on Bitcoin's market position also scared the crypto community and indicated a rise in the bearish market for crypto.
He criticized BTC for not innovating and said that it might gradually lose its market position. However, Arthur Hayes (former CEO of BitMEX) predicted that in the worst-case scenario, BTC will not fall below $50,000, which is a breath of relief for the crypto community.
Apart from these predictions and statements, there are some strong reasons for why is the crypto market down today.
Possible Reasons: Why is Crypto Down Today?
Spot Bitcoin and Ether ETFs: Continued Outflow record in Spot Bitcoin and Ethereum ETF is one of the main reasons behind the crypto market crash. On September 3, Bitcoin spot ETFs saw a net outflow of $288 Million, continuing a 5-day trend.
The total net asset value of Bitcoin spot ETFs is $52.689 Billion. Ethereum spot ETFs also had a $47.40 Million outflow, showcasing the declined interest of individuals in BTC and ETH.
Hack of Penpie Platform: Another possible reason behind the crypto market’s current situation is the major hack of Penpie Platform, a DeFi protocol built on the tokenized yield platform Pendle.
Most of the assets including LRT assets (wstETH/agETH/rswETH, etc.) were exchanged by hackers for 11,109 ETH. Of this, 1,000 ETH was laundered through Tornado Cash which created an environment of fear among the crypto community.
Losses registered by Nvidia: Nvidia Stocks recorded losses which is another factor that impacted the smooth functioning of the crypto space. The crypto market declined as major stock indexes, including Nikkei 225 and Nasdaq, fell, with Nvidia's losses impacting AI-based tokens.
Conclusion
The crypto market's bearish start in September 2024 is driven by significant outflows from Bitcoin and spot Ethereum ETFs, a major hack on the Penpie platform, and Nvidia's losses impacting AI projects. These factors collectively contribute to market uncertainty, affecting BTC, ETH, and overall crypto sentiment.
