In the latest 12-hour period, Bitcoin has witnessed a significant drop of 12.8% in value, plunging from $61,000 to $52,300, even briefly losing the $50,000 mark, according to Coinmarketcap data. This is the lowest price for the leading cryptocurrency since February 2024.
Similarly, the world’s second-largest digital currency, Ethereum, also experienced a sharp decline of 16%, trading around the $2,300 mark.
Jump Crypto, the cryptocurrency arm of proprietary trading firm Jump Trading based in Chicago, is moving millions of dollars’ worth of digital assets to exchanges, which could further increase selling pressure in the cryptocurrency market.
Data from the Blockchain analysis platform, SpotOnChain, indicates that within a 24-hour period, Jump Crypto transferred 17,576 ETH, equivalent to over $46.78 million, to exchanges such as Binance, OKX, Coinbase, Bybit, and Gate.io. These latest transactions have brought the total amount of Jump Crypto’s exchange deposits to a staggering $277 million worth of Ether in the past ten days.
This potential asset sell-off comes at a tumultuous time for the cryptocurrency market. Within the last 24 hours, 14% of the total market capitalization has been wiped out.
In June, the Commodity Futures Trading Commission (CFTC) initiated an investigation into Jump Crypto. The inquiry focuses on the company’s investment and trading activities, including its deep involvement in the cryptocurrency industry through its investment branches and market-making.
Launched in September 2021, Jump Crypto has weathered several storms, including the $325 million Wormhole hack in 2022 and significant losses from the FTX collapse. More recently, Jump was also named in the Securities and Exchange Commission (SEC) lawsuit against Terraform Labs, although it is not accused of any wrongdoing.
Aside from Jump Crypto’s actions, the sharp decline in the two largest cryptocurrencies globally resulted from investors’ concerns about the possibility of a recession in the US economy, coupled with heightened geopolitical worries, which triggered a rush for safe-haven assets.
Earlier, the cryptocurrency market had received a boost this year when the US Securities and Exchange Commission approved an exchange-traded fund (ETF) to track the spot price of Bitcoin and Ether.
“It’s a big reminder that Bitcoin and cryptocurrencies, in general, are assets that are seeing a lot of risk,” remarked Tony Sycamore, a market analyst at IG.
According to Decrypt, headwinds, including the US election, interest rate volatility, and tensions in the Middle East, are causing jitters in the market. CoinGlass data shows that the total amount of liquidations in the past 24 hours has surged to $620 million.
“Most signals indicate that crypto is heading into a major milestone. If there is a significant macro or geopolitical event like March 2020, we could see crypto take a big hit as it’s not a very convincing hold for investors,” warned Rich Rosenblum, co-founder of trading firm GSR.
In the US, the election is entering its final stretch, with a tight contest between the two prominent candidates, Donald Trump and Kamala Harris. Trump previously held an advantage over Biden but now faces challenges from the Democratic Party’s new candidate, Harris.
The uncertainty surrounding the winner and the policies to be implemented in the coming year puts pressure on cryptocurrencies.
According to Decrypt, escalating tensions in the Middle East risk erupting into a larger conflict, potentially disrupting regional trade and impacting both domestic and global markets.
