bitcoin and ethereum prices are in a deep bear market amid the ongoing slowdown in the Japanese yen carry trade and the US presidential election.
ethereum (eth) is down over 22% in the past 24 hours and 32% in the past 7 days, while bitcoin (btc) is down 16% and 26% respectively.
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Japanese yen carry trade
There are several reasons for the ongoing sell-off in cryptocurrencies. However, the most important one is the continued reduction in Japanese yen carry trades after the country's central bank raised interest rates by 0.25% last week.
This was an important decision, as Japan has a history of keeping interest rates low. It was recently the latest central bank to abandon negative interest rates.
It was also a crucial decision because it came at a time when other central banks are considering rate cuts. The Bank of England, the European Central Bank and Swiss national banks have all cut rates, while the Federal Reserve has hinted that it will cut them in September.
Traders are therefore ending a carry trade that has been around for years. A carry trade occurs when investors borrow from countries with low interest rates to invest in countries with higher interest rates. Over the years, borrowing from Japan and investing in the US has been a great trade.
bitcoin, ethereum and other altcoins fell after polls showed Kamala Harris has a better chance of beating Donald Trump. Multimarket Trump has a 53% chance of winning and Kamala has narrowed her lead in the $500 million bet. Prediction Kamala Harris defeats Trump.
They have also fallen due to ongoing geopolitical problems in the Middle East, increasing chances of a US recession and weak technical factors.
Peter Schiff criticizes ethereum and bitcoin ETFs
In a series of x-rated posts, Peter Schiff, a well-known cryptocurrency bear and gold bull, warned that bitcoin and ethereum exchange-traded funds could face a liquidity crisis on Monday.
He argues that ETFs will have to take into account the losses from the weekend and those from Monday. As a result, if ETF investors sell, then x.com/PeterSchiff/status/1820417470735220801″ target=”_blank” rel=””>liquidations would overwhelm the spot market.
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Peter Schiff has a long history of negative opinions on bitcoin and ethereum, which he considers worthless assets. However, historical data shows that both assets have significantly outperformed gold (his favorite asset).
Despite the continued decline, bitcoin is up 21% this year, while gold is up 15%. Over the past five years, btc is up 360%, while gold is up less than 80%.
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