Bitcoin, Ethereum slide with stocks amid China unrest, crypto contagion fears

Bitcoin, Ethereumand the broader digital asset market fell on Monday along with global stocks as investors apparently spooked by uncertainty surrounding China due to anti-lockdown protests sold off risk assets.

The largest digital asset was trading at $16,081 at the time of writing, according to CoinGecko – a 3% 24-hour drop.

Ethereum experienced a greater sale. The second-largest cryptocurrency by market capitalization was trading at $1,158, down nearly 5% in the last day.

The big price drop of the second largest digital asset may be related to a whale moving 73,224 Ethereum, worth $85.7 million, to the crypto exchange Binance, chain researcher Lookonchain said on Twitter on Monday.

Lookonchain said in its tweet that Ethereum may experience selling pressure. The price of ETH immediately fell 0.3% after the tweet with investors apparently panicked by the news – and continued to fall hours later.

But Matt Aaron, project manager at cielo.finance, which tracks chain data, said Decrypt that despite “we usually assume that tokens sent to centralized exchanges are to be sold”, the ETH whale’s move may be to stake Ethereum as “Binance offers ETH 2.0 staking”.

The crypto market also fell following news that crypto lender BlockFi announced it was filing for bankruptcy. Decrypt first reported today that BlockFi, which allows users to earn returns for staking idle digital assets, would file for Chapter 11 bankruptcy protection.

A few hours later, the official announcement came, adding that it would cut even more staff. The company had already cut workforce by 20% in June.

BlockFi is the latest in a long line of crypto companies that have been hit by contagion following the collapse of the crypto exchange FTX.

And before the BlockFi news, the market was already rattled by uncertainty about China: the world’s second largest economy has been hit by protests against the government’s zero Covid-19 policy, prompting investors to shift risk assets; Global stocks fell as markets opened on Monday.

Bitcoin has typically followed the US stock market this year: as traders shift stocks, the crypto price also falls.

“The price of Bitcoin continues to be volatile in this uncertain environment of rising interest rates, heightened geopolitical tensions, and amid the explosions of various centralized exchanges and lenders in the broader cryptocurrency ecosystem,” said lead analyst at Swan Bitcoin Sam Callahan Decrypt.