The global cryptocurrency market experienced a sharp downturn on Wednesday, erasing $140 billion in value within just five hours.
Between 2:00 PM and 7:00 PM UTC, total market capitalization fell from $3.54 trillion to $3.40 trillion, signaling renewed volatility across digital assets.
Leading cryptocurrencies posted notable losses during the sell-off. Bitcoin (BTC) slipped 1.83% to around $101,265, while Ethereum (ETH) fell 1.64% to $3,397.55. Among altcoins, XRP led the declines with a 3.98% drop to $2.33, followed by Solana (SOL), which sank 3.69% to $152.24. BNB also slid 1.57% to $947.96.
Notably, crypto markets are under pressure from growing uncertainty over U.S. monetary policy. Federal Reserve policymakers remain divided on whether persistent inflation or a softening labor market poses the greater risk, leaving a December rate cut uncertain.
At the same time, the recent government shutdown, which delayed key economic data, has added to the uncertainty.
As a result, investors are rotating into safer assets like gold. Bitcoin has retraced about 17% from its October highs and is struggling near $100,000 amid doubts over its role as an inflation hedge.
The downturn coincides with warnings from some on Wall Street about potential further declines in Bitcoin’s price. Morgan Stanley strategist Denny Galindo noted that Bitcoin has entered its “fall season,” a signal for investors to secure profits after multi-year rallies. The bank’s analysis compares crypto cycles to seasonal patterns, with a three-up, one-down rhythm suggesting potential downside ahead.
Despite this, institutional adoption remains strong: U.S. spot Bitcoin ETFs now manage over $137 billion, reflecting continued interest in Bitcoin as a potential inflation hedge.
Attention now turns to Bitcoin’s ability to sustain its price above the $100,000 mark, as a drop below this level could trigger broader market losses.
