Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesBotsEarnCopy
Why Did Bitcoin And Altcoins Fall? Is the Collapse in Global Markets a New Opportunity?

Why Did Bitcoin And Altcoins Fall? Is the Collapse in Global Markets a New Opportunity?

BitcoinsistemiBitcoinsistemi2024/08/05 08:18
By:Elif Azra Güven

Adam Khoo, who trades in global markets, stated that the bloodbath in Bitcoin and the markets is related to the Japanese Yen and USD parity.

While the sharp decline in Asian markets caused great anxiety in global markets, the market started the week with a bloodbath.

While the unprecedented sharp decline in Asian markets increased the selling pressure in risky assets, Bitcoin and altcoins also received their share.

While Bitcoin fell below $50,000, the declines in altcoins reached 30 percent.

While investors are experiencing great anxiety due to the decline in Bitcoin, they continue to investigate the reason for this sharp decline. The main reason for the decline is considered to be the sharp decline in the Japanese stock market, which exceeded 13 percent and has not been seen since 1987.

Adam Khoo, who trades in global markets, stated that the bloodbath in Bitcoin and the markets is related to the Japanese Yen and USD parity, and that this short-term crisis has created a new opportunity for investors, and said the following about the decline:

“The sharp rise in the JPY/USD pair caused a massive unwinding of Japanese Yen trading positions. This triggered a sharp decline in US stocks. For those who don't understand how this works, here's a quick explanation:

1) Many traders were borrowing Japanese Yen (JPY) at low interest rates, converting them to USD, and using it to buy US stocks.

2) With the Bank of Japan (BOJ) increasing interest rates, JPY strengthened significantly against the USD.

Now these traders are in trouble. Not only do they pay higher interest on the JPY they borrow, they also face huge foreign exchange losses. The USD assets these traders hold may not be enough to repay the JPY they borrowed.

3) This situation causes a huge relaxation in trading positions. Faced with huge losses and margin calls, traders sell US stocks to increase their USD holdings, convert them back into JPY, and repay their loans.

4) This could lead to more selling pressure on US stocks and further declines in the short term. The escalation of the war in the Middle East and political uncertainty in the United States also increase fear and panic.

As an investor, this is great news because these types of short-term crises and panics give me the opportunity to buy high-quality US stocks at increasingly larger discounts. Take advantage of temporary mispricing caused by short-term crises. That's how we get richer.”

*This is not investment advice.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

WEMIX Foundation Unveils WEMIX PAY Buyback Plan to Drive Sustainable Token Growth

The WEMIX Foundation remains committed to continuous innovation and community-driven growth, aligning its efforts with the evolving needs of its users.

Coinomedia2025/05/18 17:44
WEMIX Foundation Unveils WEMIX PAY Buyback Plan to Drive Sustainable Token Growth

Troller Cat Charges Toward 4000% ROI as Neiro and Notcoin Cool—Best Cryptos for Beginners in 2025

Troller Cat heats up as Stage 5 kicks in. Compare it with Neiro, and Notcoin to discover the best cryptos for beginners.Troller Cat ($TCAT): Stage 5 Goes Live—A 34.95% Price Boost Signals the Race Is OnNeiro ($NEIRO) Crashes Over 12% as Volume Surges Past Market Cap in High-Volatility MoveNotcoin ($NOT) Drops Over 6% as Traders Pull Back Amid Slowing VolumeConclusion

Coinomedia2025/05/18 17:44
Troller Cat Charges Toward 4000% ROI as Neiro and Notcoin Cool—Best Cryptos for Beginners in 2025