Optimism over cryptocurrencies sours as BTC, ETH plummet amid stock market slump

Bad news for crypto bros: Cryptocurrencies are the latest victims of plummeting stock markets, as investors flee risky assets for safer harbors. BTC had tumbled by 8.9% over the last 24 hours as of midnight yesterday, while the second largest cryptocurrency ETH fell 11.9% in the same period, marking some of the largest single-day drops seen in years.

This souring of sentiment marks a sharp reversal of the optimism that had recently permeated crypto markets following the US Securities and Exchange Commission in January approving ETFs that track the spot prices of BTC and ETH. Crypto also got a boost last month as US presidential candidates Donald Trump and Kamala Harris jockeyed to position themselves as the “pro-crypto” candidate. Trump’s appearance at the BTC 2024 convention even pushed BTC above USD 70k for the first time in over a month — despite his one-time branding of the cryptocurrency as a “scam.”

Your reminder that crypto is not a safe haven: While crypto’s fall is largely the result of the same pressures that are impacting assets everywhere, its risk profile makes it particularly susceptible to market downturn. “It’s a big reminder that BTC and crypto in general are risk assets and sit at the pointy end of the risk spectrum,” market analyst at IG Tony Sycamore tells Reuters.

THE CLOSING BELL-

The DFM fell 4.5% yesterday on turnover of AED 643.6 mn. The index is down 0.3% YTD.

In the green: Depa (+14.9%)

In the red: Agility (-9.9%), National International Holding Company (-9.9%) and Al Firdous Holdings (-9.8%).

Over on the ADX, fell 3.4% on turnover of 1.04 bn. Meanwhile Nasdaq Dubai fell 5.4%