Bitcoin (BTCUSD) briefly plummeted below $50,000 Monday for the first time since February as U.S. economic fears spread the market rout beyond stocks, leading to about $1.2 billion in crypto liquidations over the past 24 hours.

It’s been a roller-coaster ride for bitcoin investors. This morning’s low was nearly 30% below the $70,000 price level bitcoin hit exactly a week ago. The largest cryptocurrency by market cap recovered somewhat, trading above $54,000 early Monday afternoon.

Bitcoin ETFs, Altcoins, Crypto-Related Stocks Tumble

As the stock market began to crumble Friday, nervous investors pulled out $237.4 million from spot bitcoin exchange-traded funds (ETFs), according to data from Farside Investors.

As is usually the case during crypto price declines, alternative crypto assets are down even more than bitcoin. Ether (ETHUSD) is down 24% over the past week, while Solana (SOLUSD) is down 28%.

Crypto-related stocks felt the double whammy of selling pressure from both the stock and the crypto markets. Shares of MicroStrategy (MSTR), one of the largest corporate holders of bitcoin, fell 9% while those of Block (SQ) and Coinbase (COIN) declined 2% and 5%, respectively.

Bitcoin miner stocks traded lower, too. Cleanspark (CLSK) was 11% lower, Hut 8 (HUT) was down 7%, Marathon Digital (MARA) declined 5%, while Riot Platforms (RIOT) fell 3%.

Bitcoin Drawdowns Not Uncommon

It’s not uncommon for bitcoin to have multiple large price drawdowns in bull markets following halving events such as the one that recently took place in April. Despite bitcoin’s intention to operate as a safe haven, its recent selloff along with the equities market indicates it’s still trading as a risk-on asset during times of global market uncertainty.

Still, that’s not enough to shake the confidence of some long-term bitcoin bulls.

“People smash the sell button for liquid assets during broad-based panics,” Bitwise Chief Investment Officer Matt Hougan posted on X. “But from my seat, today’s events play into the long-term story for bitcoin.”

WESTLAKE, Ohio (WOIO) – Westlake Police posted on Facebook Sunday warning residents of a scam requesting cryptocurrency payments for “preemptive bail.”

Westlake Police said in a post that a resident received a call from someone claiming to be from the Cuyahoga County Sheriff’s Office saying the resident had active warrants.

The scammer sent the resident legitimate-looking documents, according to the post.

The resident offered to turn himself in at the Justice Centers, according to the post, but the scammer said the only way to avoid arrest was to pay a “preemptive bail” at the nearest cryptocurrency machine.

The resident called Westlake Police to check the legitimacy of the call before depositing any money.

Westlake Police are reminding residents that no agency will have you pay bail with gift cards or Bitcoin.

Westlake Police also said that no company will insist you stay on the phone when withdrawing cash from the bank or guide you on what to say to the teller to avoid suspicion.

“If you receive an unexpected text, email or call, be very wary,” the post read. “Education will help stem the fear that these scammers use to get your hard earned money!”

Always be sure to independently check information and never disclose personal information or allow remote control of personal devices unless sought after, Westlake Police said.

Copyright 2024 WOIO. All rights reserved.

The new study has delved into cryptocurrency prices, particularly bitcoin, revealing that markets are significantly influenced by both conventional financial factors and crypto-specific factors.

The paper by Austin Adams from Uniswap Labs, Markus Ibert from the Copenhagen Business School Department of Finance, and Gordon Liao from Circle Internet Financial was published earlier this week.

✨New research ✨

We teamed up with @circle and the Copenhagen Business School to explore what drives crypto asset prices, examining the impact of:

+ Monetary policy
+ Broad market risk premium
+ Crypto-specific demandhttps://t.co/S0FqJGV7vb

— Uniswap Labs 🦄 (@Uniswap) July 30, 2024

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What Drives Crypto Markets?

The researchers used a “sign-restricted vector auto-regressive (VAR) model” enabling them to examine crypto price fluctuations that come from spillovers from traditional financial markets versus risks inherent to crypto assets.

The new model broke bitcoin returns down into various shocks, including monetary policy, conventional risk premium, adoption, and crypto risk premium shocks. It revealed that monetary policy shocks have a substantial impact on bitcoin prices, especially over longer time horizons.

For example, contractionary monetary policy when the Federal Reserve was raising interest rates accounted for over two-thirds of bitcoin’s sharp decline in 2022 when the asset retreated around 65%.

The crypto contagion caused by the collapse of the Terra/Luna ecosystem and FTX later in the year also contributed to that big bear market.

The research noted that while conventional shocks can have large lower-frequency impacts on crypto prices, “most day-to-day movements in bitcoin prices are left unexplained” by these disruptions.

It also found that when there is turmoil in the crypto market, people tend to move their money into stablecoins, exhibiting behavior similar to how investors might buy gold or government bonds during stock market turbulence.

When BlackRock announced plans for a Bitcoin ETF, the model detected both increased adoption of the asset class and a decrease in crypto-specific risk aversion. In simple terms, this news made people more interested in BTC and less worried about its risks, driving up the price.

Crypto Not Yet Integrated With TradFi

The researchers concluded that while crypto isn’t entirely separate from the broader financial ecosystem, it’s not completely integrated either.

Their findings highlight the importance of identifying drivers of crypto returns and understanding the asset class’s evolving relationship with traditional financial markets.

With a Federal Reserve rate cut expected in September, crypto markets should do well later this year due to increased liquidity and risk appetite. This also aligns with the four-year market cycle, which should see a bull market peak in late 2025 … if history rhymes.