Highlights:
- A crypto expert has explained the reasons behind the crypto market slumps.
- The rising unemployment rate in the U.S. made the expert list alongside three other factors.
- The global crypto market continues to bleed, with a 4% decline in the past 24 hours.
It is no longer news that the crypto market is experiencing turmoil, evidenced by declining market variables. Consequently, market participants have been probing to pinpoint what could be the reasons behind the crypto market slumps. At the same time, several contributing factors have been making rounds within the crypto community, compounding an already precarious state.
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Amid the confusion, Ash Crypto has outlined the rising unemployment rate in the U.S. as a contributing factor to the crypto market slumps. Interestingly, the market expert also spotlighted three other driving factors, which this insight will dwell on.
Rising Unemployment Rate and the Crypto Market Slumps
According to the expert, the first contributing factor to the crypto market slumps is the rising unemployment rate in the U.S. He noted that the U.S. unemployment rate spiked to touch 4.3%, indicating a concerning situation that could induce market declines.
In a different tweet, Charlie Bilello acknowledged the surging unemployment rate. He described it as the highest level ever attained since October 2021. Hence, it underscores a debilitating prevailing situation.
The US Unemployment Rate moved up to 4.3% in July, the highest level since October 2021.https://t.co/l5IYmkeySJ pic.twitter.com/hSc8Mf9sm4
— Charlie Bilello (@charliebilello) August 2, 2024
For Ash Crypto, the high unemployment rate signifies that a recession appears imminent for the U.S. economy. Consequently, it led to the collapse of the stock and crypto market.
Nearly $3 trillion has been wiped from the US stock market due to growing fears of a global recession.
Today is the worst day for stocks since March 2020 when the world shut down for a pretend virus. pic.twitter.com/913CQAAToD
— Layah Heilpern (@LayahHeilpern) August 2, 2024
Japanese Yen Strengthening
Per Ash crypto, Japanese Yen reinforcement contributes to the crypto market slumps. Citing the role of the Japanese Yen in the embattled crypto market, the expert mentioned an increment in interest rates. Notably, the Bank of Japan (BOJ) has raised borrowing costs for the first time in seventeen years.
Ash Crypto stated that the increased interest rate caused investors to withdraw their funds from risky assets like U.S. equities. He explained further that before the increment, borrowing Yen would cost nothing. However, the status quo has changed, and investors are grabbing the opportunities.
Simplifying the Japanese Yen saga, a verified X user explained, “As a result of the increased interest rates and the signal to the market, investors are now concerned that the money they borrowed for free is no longer free. Therefore, they are unwinding their trades and sending the funds back to Japan.”
This is the most important chart in the world today.
It's the chart of the Japanese Yen vs the USD.
Why is it so important?
1. For 30 years Japan has 0% interest on their currency.
2. As a result for 30 years investor borrowed YEN at no cost and invested it globally. They… pic.twitter.com/1IpofcvroZ
— Ran Neuner (@cryptomanran) August 2, 2024
World War III Fear
World War III (WWIII) fear was one of the leading causes of the plummeting crypto market. Ash Crypto revealed that for the fifth time in 2024, WWIII fears have been making rounds. The expert explained that war rumors tend to elicit fear and uncertainties. Consequently, investors are dumping risky assets to be on a safer side.
Mt. Gox and Genesis Distribution
While Mt.Gox distribution is rounding up, Genesis began depositing Bitcoins to different addresses. According to Ash Crypto, Genesis transferred over one billion BTC just yesterday. When such shifts happen, chances abound that the asset’s price involved will be affected significantly.
Temporary Setback Expected to Rebound in Three Months
Summarizing his take on why the crypto market seems to be declining, Ash Crypto assured that it is only a transient phase. Per the market expert, the market needs only three months for fears to subside, followed by a rebound.
WHY IS BITCOIN DUMPING?
TODAY BITCOIN DUMPED BELOW
$61,000, CAUSING OVER $260
MILLION IN LONG LIQUIDATIONS
HERE'S WHY BTC DUMPED
1) UNEMPLOYMENT RATE RISING
– YESTERDAY, THE US UNEMPLOYMENT RATE CAME AT 4.3% WHICH WAS HIGHER THAN EXPECTED
– HIGH UNEMPLOYMENT… pic.twitter.com/b7A6hyQNzt— Ash Crypto (@Ashcryptoreal) August 3, 2024
Crypto Market Slumps Evidence
At the time of press, the global crypto market is down by about 4% in the past 24 hours, with a $2.252 trillion valuation. Bitcoin (BTC) is also down by about 4%, trading at roughly $60,600, and boasts a $1.196 trillion market capitalization.
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