- A crypto crash happened today, with Bitcoin and most altcoins being in the red.
- Some of the top laggards were coins like XLM, LUNC, and XRP.
- Investors are rotating from crypto to the booming stock market.
A crypto crash is happening today, with Bitcoin (BTC), Stellar Lumens (XLM), Terra Luna Classic (LUNC), and Ripple (XRP) leading the losses. Bitcoin plunged below $68,000, while the market capitalization of all coins fell by 4.8% to $2.32 trillion. LUNC, XLM, and XRP were among the top laggards.
Crypto Crash Triggers by Wall Street Selling
The ongoing crypto market crash is happening because of the ongoing selling by Wall Street investors. Data shows that these investors dumped Bitcoin ETFs worth over $483 million on Monday, with IBIT losing over $400 million. The ongoing redemptions brings the cumulative total in the last three weeks to over $3 billion.
The same happened in Ethereum, where investors dumped funds worth over $44 million on Monday. They redeemed Ethereum ETFs worth over $540 million in May this year.
On the positive side, some altcoin ETFs have continued to add assets. XRP ETFs had the best month in May as they added $118 million. Hyperliquid ETFs also added millions of assets in May.
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Still, there are signs that investors are capitulating and possibly moving to the better-performing stock market. Data shows that stocks and bonds ETFs added over $200 billion in assets in May, with VOO nearing the $1 trillion assets under management (AUM) mark.
Investors are mostly interested in trending themes like artificial intelligence and space. For example, the Roundhill Memory ETF (DRAM) has added over $13 billion in assets in the past two months. Also, the popular UFO and NASA ETFs have added billions of dollars in assets ahead of the SpaceX IPO.
The ongoing rotation from crypto to stocks also explains why gold continues to underperform the market this year. It also explains why AI coins like Humanity, Worldcoin, and Venice Token are doing better than Bitcoin.
Falling Crypto Fear and Greed Index and Rising Liquidations
The crypto market crash is also happening because of the falling Crypto Fear and Greed Index, which is a sign that investors are increasingly fearful. The index dropped to the fear zone of 26. If the trend continues, it may soon drop to the extreme fear level. In most periods, Bitcoin and other altcoins drop when the index is falling, as it means that investors have embraced a risk-off sentiment. These coins rise when the index is rising.
The crypto crash is also happening as investors react to the recent decision by Michael Saylor’s Strategy to sell some of its Bitcoin holdings. It was the first time that the company has sold after years of buying.
Meanwhile, the sell-off triggered a wave of liquidations, which normally puts more pressure on tokens. Liquidations jumped by over 92% in the last 24 hours to over $1.2 billion. Bitcoin positions worth over $637 million were liquidated, while Ethereum positions worth over $284 million were liquidated.
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