Cryptocurrency Decline Mirrors Global Market Drop, Binance New Zealand

Despite the recent sharp decline in global financial markets and its impact on the cryptocurrency sector, the fundamental value and potential of digital assets remain intact according to Binance Australia and New Zealand.

The cryptocurrency market started the week with a notable drop, with major tokens falling by double digits. The total market capitalisation for cryptocurrencies decreased by nearly 20%, from $USD2.16 trillion to $USD1.76 trillion according to a Binance Research report published 5 August 2024.

Bitcoin, which had reached an all-time high of $USD75,830 in March following the approval of spot bitcoin ETFs, saw its most substantial decline since 2022, with a 15% decrease. Ethereum followed up with 22%. Since then Bitcoin has recovered over 5%, priced at USD 55,700 .

This downturn came as global equity markets retreated sharply, with rising fears of a global economic slowdown triggering a risk-off sentiment that has impacted various asset classes, including cryptocurrencies.

The market uncertainty triggered significant liquidations, with over $USD819 million in liquidations occurring on 5 August, marking the highest daily volume since 13 April 2024, ahead of Bitcoin's halving event.

Ben Rose, General Manager of Binance Australia and New Zealand, said such volatility is not uncommon for the cryptocurrency market which has historically demonstrated resilience and has rebounded after periods of decline.

“The current market volatility reflects a broader financial cycle that is impacting all asset classes, including cryptocurrencies. While the current decline is notable, history shows that the cryptocurrency market has demonstrated resilience and recovery following periods of correction.”

“Despite the current challenges, we do not view this downturn as indicative of a long-term negative trend for the crypto market. It is worth remembering that on a year-to-date basis, Bitcoin has gone up approximately 27%,” Mr Rose said.

“With anticipated changes such as potential US Federal Reserve interest rate cuts and economic and political dynamics, there remains significant potential for market fluctuations in both directions. Bitcoin and the wider crypto market continue to hold long-term potential and we encourage investors to stay informed about ongoing developments.”

About Binance

Binance is the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider with a financial service suite that includes the largest digital asset exchange by volume. Trusted by millions worldwide, the Binance platform is dedicated to increasing the freedom of money for users and features an unmatched portfolio of crypto products and offerings, including: trading and finance, education, data and research, social good, investment and incubation, decentralisation and infrastructure solutions, and more.

About Binance New Zealand

Binance New Zealand is a leading digital currency exchange platform that enables Kiwi customers to easily buy and trade cryptocurrencies. Binance New Zealand offers users deep liquidity and convenient deposit and withdrawal methods while leveraging cutting-edge technology from Binance.com's advanced trading platform.

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