Several reasons have led to the sharp decline in cryptocurrencies, including¹ ²:
- *Geopolitical tensions and changes in opinion in the US presidential elections*: Geopolitical tensions and shifts in opinion in the US presidential elections affected market stability.
- *The decoupling of the Japanese yen*: The decoupling of the Japanese yen contributed to the decline in cryptocurrency prices, as the US dollar rose against the Japanese yen, leading to a drop in global markets.
- *Concerns about economic recession*: Fears of an economic recession rose after concerning unemployment rates were published in the United States, leading to expectations of emergency interest rate cuts by the US Federal Reserve.
- *Mt. Gox compensation distribution*: The overall impact of the Mt. Gox compensation distribution has yet to be seen, which may affect market stability.
- *Selling positions by Jump Crypto*: The major trading firm Jump Crypto may be selling its positions, increasing pressure on the market.
- *Large sell-offs*: A mysterious whale in Solana transferred $120 million worth of SOL from various validators and sent the coins to Coinbase Prime.
- *Cryptocurrency-specific reasons*:
- *Lack of fixed assets*: There are no fixed assets to protect the value of cryptocurrencies, increasing investment risks.
- *Cryptocurrency concerns*: There are inherent risks in cryptocurrencies, such as high volatility in their values and a lack of reserves to assess their price.
- *Market correction*: The cryptocurrency market experienced a massive bull run, causing many cryptocurrencies to reach all-time highs, followed by a market correction.
- *Regulatory uncertainty*: The regulatory landscape surrounding cryptocurrencies is constantly evolving, creating a state of uncertainty in the market.
- *Environmental concerns*: Cryptocurrency mining requires a significant amount of energy, raising concerns about its impact on the environment.
