Crypto Market Sees Significant Value Drop
The cryptocurrency market has experienced a dramatic decline, with its total capitalization plummeting from over $4.02 trillion to approximately $3.98 trillion following a sharp price drop. This downturn has resulted in a staggering loss of around $133 billion, attributed to a combination of recent remarks by US Treasury Secretary Scott Bessent and the release of the latest US Producer Price Index (PPI) data.
Major Cryptocurrencies Decline Amid Market Uncertainty
The recently published US PPI data reflected the highest rise in three years, primarily driven by increased costs for goods and services, signaling a potential rise in inflation. This troubling trend poses a challenge for the Federal Reserve, dampening expectations for aggressive interest rate cuts in the near future. As a result, investor sentiment has soured, leading to a notable decline in the crypto market. The recent $133 billion loss marks the most significant liquidation event since early August, causing the market cap to shrink to $3.98 trillion as traders capitalized on Bitcoin’s recent price surge.
Bitcoin (BTC), after reaching an all-time high of $124,474, has since dropped to approximately $118,133.73. Ethereum (ETH), which was nearing the $5,000 mark, has declined to about $4,558.81. Ripple’s XRP has seen a slight decrease to $3.09, while Solana (SOL) has retreated from over $201 to $191.01, reflecting a 2% drop in just 24 hours. Additionally, the CoinDesk 20 Index of major cryptocurrencies experienced a decrease of 2.1% during the same period. The abrupt price fluctuations resulted in over $1 billion in leveraged trading positions being liquidated, with long traders bearing the brunt of these losses.
US Treasury Secretary Dismisses Further Bitcoin Purchases
Scott Bessent, a former hedge fund manager and current US Treasury Secretary, has made comments that may have negatively impacted Bitcoin’s recent rally. In a recent Fox Business interview, Bessent stated that the US government has no intentions of increasing its Bitcoin holdings for its strategic reserves or other digital asset collections. He noted, “We are not going to be buying that, but we are going to use confiscated assets and continue to build that up.”
According to Bessent, the valuation of the US Bitcoin reserve is estimated to be between $15 billion and $20 billion, based on Bitcoin’s price around $120,000 at the time. Following his remarks, Bitcoin’s value saw a notable decline. Although he later issued a more positive statement regarding Bitcoin on social media, the market has yet to recover from the ensuing selloff. The Bitcoin that is forfeited to the government is intended to serve as the foundation for the Strategic Bitcoin Reserve established by a March Executive Order under President Trump.
Disclaimer
This report is dedicated to providing fair and transparent coverage of cryptocurrency developments. While it aims to deliver accurate and timely information, it should not be construed as financial or investment advice. Given the volatile nature of market conditions, individuals are encouraged to conduct their own research and consult with a financial professional prior to making any investment decisions based on this information.
