Market Update: A Rollercoaster Day for Crypto and Stocks
Just hours ago, the cryptocurrency markets experienced a surge in optimism as the Securities and Exchange Commission hinted at the dismissal of its lawsuit against Coinbase (COIN). This positive regulatory news led to a 5% increase in COIN’s value, along with significant gains for the ever-important crypto trading platform Robinhood (HOOD). Furthermore, Bitcoin (BTC) broke free from its recent narrow trading range, inching closer to the elusive $100,000 milestone.
However, the excitement was short-lived. The first major setback came during the late morning session in the U.S. when Bybit, a prominent cryptocurrency exchange, fell victim to a staggering hack worth approximately $1.5 billion—marking it as the largest exploit in the history of cryptocurrency. This unfortunate incident triggered a rapid decline in the prices of both Bitcoin and Ether (ETH), which plummeted nearly 2% within minutes.
Despite this abrupt downturn, prices seemed to find a semblance of stability, with Bitcoin managing to rebound slightly. Yet, any signs of recovery were quickly extinguished as U.S. stocks began to experience modest losses, which intensified throughout the afternoon trading session.
Among the contributing factors for this swift retreat was a disappointing reading from the Michigan Consumer Sentiment Index, which unexpectedly dropped to 64.7, falling short of forecasts that anticipated a rise to 67.8. Additionally, the survey revealed an increase in inflation expectations, rising to 3.5% compared to the predicted 3.3%.
An unexpected twist in the day’s events was a new coronavirus scare originating from China. Researchers at the Wuhan Institute identified a virus dubbed HKU5-CoV-2, which they claim bears a “striking resemblance” to the virus responsible for the 2020 pandemic, according to reports from the Daily Mail.
As the trading day drew to a close on Friday, the Nasdaq Composite had fallen by 2.2%, while the S&P 500 was down by 1.7%. The yield on the 10-year U.S. Treasury bond also saw a decline, dropping nine basis points to 4.42%.
In the realm of cryptocurrencies, Bitcoin has now erased much of its recent gains, trading back down to approximately $95,000, marking a nearly 4% decrease over the past 24 hours. Likewise, Ether (ETH) has retreated to around $2,650, also reflecting a decline of about 4%. Overall, the broader CoinDesk 20 Index is down by 4.4%, illustrating the turbulent nature of the current market landscape.
