Good morning from Asia. Here’s a quick look at the latest before the opening bell.
Bitcoin has slipped below $90,000 in Asian markets today, marking its lowest point in six months. This drop comes as traders adjust their risk exposure while waiting for important U.S. data that has been postponed due to the government shutdown.
Investors are particularly anticipating the September nonfarm payrolls report set to be released on Thursday. Delays from the prolonged U.S. government shutdown left many speculating about the overall health of the largest economy in the world.
Expectations concerning interest rates are shifting as well. The market now estimates a roughly 40% chance of a Fed interest rate cut in December, down from over 60% earlier this month. It seems investors are leaning towards cash and safer assets, stepping back from high-risk trades tied to artificial intelligence and cryptocurrencies.
JUST IN: Bitcoin below $90,000. Take a look at the numbers:
- Bitcoin: $90,190, down 5.1%
- Ether: $2,994, down 5.5%
- XRP: $2.15, down 4.5%
- Cryptocurrency market cap: $3.17 trillion, down 4.4%
This decline has affected stock prices as well. On Monday, U.S. stocks closed significantly lower. Both the S&P 500 and Nasdaq fell below key technical levels for the first time since late April, primarily due to a lagging jobs report while traders braced themselves for results from major retailers and the semiconductor giant Nvidia.
As anticipation builds for the delayed U.S. jobs report and Nvidia’s quarterly results, U.S. stocks continued to slide, raising concerns among investors—evidenced by decreased leverage in cryptocurrency markets as traders unwind their positions.
In Asia, the market also took a hit. The MSCI index of Asia-Pacific stocks outside Japan dropped by 0.7%, while Japan’s Nikkei average saw a decline of over 2%. Many see this drop as a sign of caution ahead of the important U.S. data and Nvidia’s earnings report, reflecting a change in the enthusiasm surrounding AI trading that has fueled this year’s stock rally.
Bitcoin’s fall mirrors this shift in sentiment. The cryptocurrency fell below that $90,000 threshold as traders adjusted positions originally set based on expectations of aggressive easing from the Fed, now becoming more cautious about macroeconomic risks.
Investment manager Gadi Chait from Zapo Bank noted that this decline seems to be unsettling newer market participants more than long-standing holders. He contended that this drop does not signify a setback for long-term cryptocurrency adoption but is more about unwinding leverage and adjusting portfolios.
“While some might search for specific causes—whether related to residual effects from last October’s deleveraging or broader macroeconomic shifts—the actual reason is largely secondary,” he stated. “Periodic downturns are a common aspect of this market. Those familiar with it recognize this cycle. This isn’t new, and it will happen again.”
Analysts at Bitfinex shared similar thoughts, highlighting the scale of the recent drop. “This is statistically the third largest decline since 2023 and the second largest since the launch of Bitcoin ETFs by major U.S. providers. It feels like we’re approaching a regional bottom relatively soon,” they reported.
Investor sentiment towards stocks remains delicate. There’s evident pressure on the stock market this month, leading many to question if the excitement over AI has inflated valuations to unsustainable levels, especially as growth indicators weaken and policies stay tight. The upcoming Nvidia earnings on Wednesday are central to this discourse.
The longest U.S. government shutdown in history has finally ended, which should allow for a resumption of economic data. However, markets seem to be reacting according to some prior economic developments amidst the ongoing digital divide.
Even with Fed officials dismissing the notion of immediate easing, private surveys indicate signs of economic slowdown.
