The cryptocurrency market is grappling with continuous and massive liquidations, contradicting expectations of stability. In just the past 24 hours, liquidations have amounted to $712 million, with Bitcoin accounting for around $300 million of this sum. Investors are left wondering about the reasons behind these developments and what potential market shifts lie ahead.
Recent Developments in Crypto
There have been several notable events within the last hour. Strategy STRE increased its stock offering from 350 million euros to 650 million, reflecting the company’s rising need for cash to acquire more Bitcoin. Recently, at least two crypto reserve companies have been compelled to announce stock buyback programs due to negative NAV (Net Asset Value) concerns.
When crypto reserve companies are pushed into stock buybacks due to negative NAV, it poses a significant problem. ETHZilla has already started selling ETH to purchase shares. This trend was also seen with Solana Company, although they did not announce a SOL Coin sale. It showcases how companies, other than Strategy, might struggle to navigate future bear markets and hints at potential large-scale sell-offs.
Minutes ago, Paystand announced the acquisition of BitWage to support crypto payments, marking a positive note in an otherwise tumultuous market hour.
Fintech giant, Stripe, is seriously venturing into the crypto space and has initiated further steps. Blockchain-based Tempo, launched by Paradigm and Stripe, began a $25 million fundraising round for crypto infrastructure company Commonware, aiming to expedite blockchain payments.
Current Market Situation
Although futures started well, they have since lost momentum. Following intense sales in the AI sector yesterday, risk appetite is waning. Moreover, the negative fallout from market closures is becoming more pronounced. Nvidia’s pre-market trading saw a 1.3% decline, and for three years, Wall Street has been vocal about an impending AI bubble burst, with these warnings gaining traction now. Microsoft is experiencing its longest losing streak since 2010.
Today, a Fed official, Miran, will speak about stablecoins and monetary policy at the New York Harvard Club, with a Q&A session.
Nasdaq 100 futures dropped by 0.6%. Meanwhile, the S&P 500 ended its steady upward trend with a 1.8% weekly decline. Consequently, BTC is enduring its worst week since March. For cryptocurrencies to have a positive start to the weekend, the Mega7 must rebound, and the broader market must improve.