A Weekend of Heavy Losses
The cryptocurrency market has just experienced another big crash. As I recorded this update, BTC had fallen below $49,000 and ETH below $2,200. The entire crypto market liquidated more than $800 million within 24 hours. Whether you look at mainstream coins or altcoins, everything is bleeding red. This weekend has been hard on all of us.
Before getting into the reasons, I want to say clearly: I personally still think the market will warm up and the bull market will come sooner or later. I will explain that position in detail at the end, but first let's look at what actually caused this crash.
Macro Storm: Jobs Data, Buffett, and Global Stock Sell-off
There are two main reasons I see behind this crash, and the first one is at the macro level. The first signal came from the United States announcing an unemployment rate of 4.3%, which acted as a catalyst for market panic. At the same time, Buffett's Berkshire Hathaway has been selling stocks continuously. Its holdings in the United States dropped by nearly 50% compared with the first quarter of 2024, a position worth about $88 billion.
Then the entire US stock market, along with Asian and European stock markets, began to fall sharply. Stocks of global giants such as Intel, Microsoft, Google, and Adobe all fell. Intel even dropped by nearly 30% in a single day. Meanwhile, the Bitcoin spot ETF recorded its highest outflow in the past three months. Only gold futures hit a new all-time high during this crash.
So yes, we got a crypto crash, but the crypto news itself was not that big of a factor. The most important thing is that global market sentiment is terrible, and that impacted us directly. I also want to use these events to criticize the US government. The longer high interest rates are maintained, the more serious the damage to the entire market. The stock market and the entire crypto market are paying for the long-term high interest rates in the United States. That should end.
It is no surprise we took a hit, and it would not surprise me if the downfall continues for a while. But if you hold Bitcoin spot, I think there is no problem, because I am still very confident in the entire crypto market, especially Bitcoin. If you are trading futures, however, you had better consider your investment situation and maybe make some adjustments. I especially think about those trading with high leverage in moments like this.
Crypto-Specific Pressure: Jump Trading and ETF Outflows
The second reason, this time specific to the crypto market, is that Jump Trading appears to be selling large amounts of ETH. Jump Trading is a well-known crypto market maker, and they are currently redeeming 410 million wstETH into ETH and then transferring those funds to centralized exchanges. Everyone is speculating about what is happening with them.
This kind of move adds fear, but I have to say something important here, and it is one of the reasons I still have confidence in the crypto market. The entire crypto market is now highly manipulated. This information about Jump Trading is likely being deliberately released by these market makers.
You can clearly see that crypto is increasingly accepted. Trump has even announced in a very bold way that he wants to be the first crypto president. Market makers and the biggest investors must hope that more people will enter this market. That is why I personally think they will pull the market up afterwards. A market increasingly accepted by the masses: would they really be willing to give it up? No. Would they crash it to buy lower and then afterwards pull it back up? Maybe, yes.
Why I Still Believe the Bull Market Will Return
In the coming weeks and months, there will be interest rate cuts in the United States. CZ will be released from prison. The US election is coming. These are all likely to be favorable events.
Combined with the above reasons, what I think is that the crypto market may continue to be sluggish for a while. Sure, it may even fall again. But no matter how negative the news is, no matter how frightening it gets, as long as there is still this long-term positive frame, the bull market will definitely come sooner or later.
Everyone is panicking right now, but sometimes panic is not necessarily a bad thing. If everyone were optimistic and believed the bull market is coming, then the bull market would most likely not come. On the contrary, when everyone is panicking and desperate, when they all think the entire market will not get better, it is usually at that time that it actually does. The crypto market is just like that: counterintuitive, every single time.
Panic as an Opportunity
I want to emphasize that the current fear is real, but I do not see it as the end of the cycle. The concentration of bad news this weekend, from macro data to ETF outflows to Jump Trading's moves, created a perfect storm. Yet none of these events, on their own, changes the long-term adoption trend I see in crypto.
If you hold Bitcoin spot, I repeat: I see no problem. The entire crypto market and especially Bitcoin remain, in my view, on a path toward broader acceptance. The upcoming catalysts are not minor. Interest rate cuts, the resolution of CZ's legal situation, and the US election are all scheduled to happen soon. These are exactly the kinds of events that can shift sentiment quickly.
So yes, the next few weeks may be rough. The market may test lower levels again. But as long as the long-term positive frame remains intact, I remain confident. Panic selling is often the prelude to rebuilding, and that has been true in every cycle I have watched.
Conclusion: The Bull Market Will Return Sooner or Later
This crash was driven mainly by macro factors: rising US unemployment, Buffett's stock sales, and sharp falls in global stock markets. Crypto-specific news, such as Jump Trading's ETH movements, added fuel to the fire but was not the root cause. The entire market is paying for long-term high interest rates, and that is a problem the US government must resolve.
I remain confident in Bitcoin spot and believe the bull market will come sooner or later. The long-term positive frame includes interest rate cuts, CZ's release, and the US election, all of which are likely to support the market. The current panic may even be a healthy reset. When everyone is desperate, that is often when the market turns.
Stay calm, manage your risk, and remember that crypto is counterintuitive. The bull market has not disappeared. It is just waiting for the noise to clear.