US stocks are losing $1.25T a day – more than the entire crypto market cap


Bitcoin (BTC) and altcoins lost heavily on August 26 after the United States Federal Reserve made aggressive comments about economic policy.

Across the board, risky assets took a major hit – US stocks lost about $1.25 trillion in one session.

Analyst: Powell stops with ‘soft landing’ rhetoric

As comments from Fed Chair Jerome Powell suggested that bigger rate hikes were still firmly on the table, despite recent data indicating inflation was already slowing, investors rushed to mitigate risk.

“Restoring price stability will likely require restrictive policies to be maintained for some time. The historic record strongly warns against premature policy easing,” Powell said at the Jackson Hole annual economic symposium.

The S&P 500 closed 3.4% lower on the day, reaching its lowest level since late July. The Nasdaq Composite Index copied the move and extended losses, down 4%.

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Overall, the US stock market lost more value than the entire market cap of Bitcoin and altcoins combined.

According to data from TSTIME Markets Pro and TradingView, the total crypto market cap dropped overnight from $1.029 trillion to $936.87 billion, representing an 8.95% drop.

Total Crypto Market Cap 1 Day Candle Chart. Source: TradingView

While some argued that Powell’s words were not the essential area to consider in terms of future Fed policy, others noted that past stories were slowly being let loose when it came to the inflation outlook.

Holger Zschaepitz, popular market commentator for the German media publication Die Welt, believed the speech had reached “all the aggressive notes”, with Powell “skipping the mild one”.

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“The aggressive features were his recognition of the pain likely to be needed to ease inflation — no more soft landing, the indication that rates need to be moved above neutral,” he said. added in a section of Twitter comments.

Powell also said the decision on how far to extend key interest rates in September “depends on the aggregate of incoming data and the evolving outlook.”

The latest readings from CME Group’s FedWatch Tool, meanwhile, showed a majority consensus in favor of a 75 basis point increase in September, following July’s move.

Table of probability percentages from the Fed. Source: CME Group

No hodler can hide the pain

However, there was no escaping the immediate impact of the risky asset route for crypto investors.

Related: Price Analysis 8/26: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, SHIB, MATIC

BTC/USD lost as much as 8.8% at one point, plunging below $20,000 for the first time since July 14, before recovering to hover just above the significant line in the sand.

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BTC/USD 1-hour candlestick chart (bit stamp). Source: TradingView

The picture was no less dire for altcoins. Ether (ETH), the largest altcoin by market cap, saw intraday losses close to 14%.

ETH/USD circled $1,500 at the time of writing on August 27, wiping out an entire month’s gains. Among the price-takes was a new warning from popular trader Crypto Ed, eyeing a possible further leg down.

“Could drop to $1200-1300 before there is a significant jump”, part of being last Read Twitter update.

ETH/USD 1 Day Candlestick Chart (Binance). Source: TradingView

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move carries risks, you should do your own research when making a decision.