South Korean virtual asset market, including Bitcoin (BTC), has seen sharp declines, wiping out all the gains made by Ethereum (ETH) this year.
According to the crypto price tracker CoinMarketCap, as of 11:15 AM today, Ethereum traded at $2,263, down 23.91% from the previous day. This marks a significant decline of over 20% in just one day.
In South Korea’s major cryptocurrency exchange, Bithumb, Ethereum traded at 3.27 million won ($2,330), plummeting by 20.24% compared to the previous day. This is similar to the price at the end of last year, when Ethereum traded at $2,300 on December 30. It rose steadily from January, increasing by around 76% to $4,000 earlier this year. In essence, it has lost all those gains.
The weakness of Bitcoin and Ethereum has been attributed to various factors.
Cryptocurrency analyst and investor Miles Deutscher highlighted several reasons for the current market crash on X (formerly Twitter), including the decreased likelihood of Donald Trump’s re-election, fears surrounding possible economic downturn, stock market corrections, a strengthening yen against the US dollar, rising geopolitical tensions, and the liquidation of futures positions.
Following the US Labor Department’s employment data released last Friday, concerns about a potential recession have intensified. Recent polls show that despite his pro-cryptocurrency stance, Trump’s chances of being re-elected appear to have diminished. This comes alongside the Bank of Japan’s recent interest rate hike, strengthening the yen. Moreover, the spot Ethereum ETF, which began trading on the 23rd of last month, has consistently underperformed.
According to Paradigm, the US spot Ethereum ETF has experienced “net outflows” on all but three of its nine trading days, meaning more funds have exited than entered. On Friday, the situation worsened when the US spot Bitcoin ETF saw “record-breaking” net outflows, with the spot Ethereum ETF also recording a net outflow of $54 million.