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At the beginning of the 5th of August week, volatility peaked in global markets. Cryptocurrencies were also affected by deepening losses. While the cryptocurrency market has experienced its biggest decline since 2022, the market value has melted $ 300 billion.

TURKEY - Global markets started the week of 5 August with deepening losses. On the morning of 5 August, the Nikkei stock exchange in the Asian market closed with a 12% decline. Selling pressure spread across the globe as the Bank of Japan, the central bank of Japan, started to raise interest rates and the possibility that the Fed would start to cut interest rates became certain, combined with below-expected employment data in the US and the highest unemployment level since 2021. While $ 1.4 trillion was erased from the market value of the US broad index S&P 500, cryptocurrency markets also suffered huge losses due to both geopolitical tensions and macro conditions.

300 billion dollars melted in one day

Cryptocurrency markets have experienced the biggest decline since the crisis of confidence in 2022. With the sales on 5 August, the value of the cryptocurrency markets melted$ 300 billion. While Bitcoin reached $ 54,000 on the evening of the day it tested $ 50,000, Ethereum was able to reach $ 2,400 from $ 2,200 levels. Gate.TR CEO Kafkas Sönmez, who shared his evaluations on the subject, said, ‘Cryptocurrency markets are very sensitive to macro conditions. In addition, tensions between Iran and Israel and allegations of Iran's retaliation preparations were added to these developments. The uncertainty for investors spread around the world and fluctuations in risky assets reached their highest levels. The Cboe Volatility Index VIX, which measures volatility and is known as Wall Street's fear indicator, reached the levels during the pandemic and the 2008 crisis. Volatility in crypto has reached a level that can exceed the VIX, ‘he said.

Good news Institutional interest has not diminished

Emphasising that the losses seen in recent days have occurred with the simultaneous occurrence of many factors, Kafkas Sönmez said, ‘Recent losses actually show how the cryptocurrency markets will spend the rest of 2024 and what will be affected. Macroeconomic developments and politics have become more decisive for crypto than ever before. Investors need optimistic messages at such times, and Bernstein's latest report is important in this respect. Bernstein analysts note that they do not see an increasing negativity for crypto. Bitcoin's institutional adoption trends, ETF inflows and banks' approaches to crypto ETFs are still positive. For example, it was recently claimed that a giant bank such as Morgan Stanley has given the green light to recommend crypto ETFs to high net worth investors with a fortune of $ 1.5 million and above. There is little doubt that the interest of Wall Street banks and traditional investors will increase in the coming period, ‘he said.

‘It is necessary to be careful against panic sales’

Reminding that there are bad periods and big losses in the nature of capital and digital asset markets, Gate.TR CEO Kafkas Sönmez concluded his evaluations with the following statements:

‘Panic sales, which define situations where investors decide to sell by being influenced by the actions and sentiments of other players in the market, are not new to either the stock markets or the cryptocurrency markets. Nevertheless, in times of chaos, it is critical to observe the course of events without succumbing to emotions and panic in order to avoid greater medium and long-term risks that panic selling may cause. We need to be careful against panic selling. This time we seem to be facing more of a macroeconomic correction. It should not be forgotten that Bitcoin was trading at $ 42 thousand in January 2024. Despite the deepening sales today, it managed to hold on to $ 54,000. As Gate.TR, Turkey's gateway to crypto, we stand by our investors even in times of crisis and fear in the market. We share our observations, analyses and evaluations transparently and try to make them feel safe 24/7.’