Wall Street’s screens flashed red Monday as U.S. stock indexes stumbled, bitcoin (BTC) tumbled to $77,393, and the crypto market shed billions to hover at $2.57 trillion. Investors scrambled to make sense of the chaos. Let’s unpack five key drivers behind the day’s fiery market meltdown.
Economic Policy Uncertainty
President Donald Trump’s tariff announcements on Canadian, Mexican, and Chinese imports this year have fueled fears of a global trade war and economic slowdown. Combined with his refusal to rule out a recession, the Dow fell 2.3%, the S&P 500 dropped 3.1%, and the Nasdaq Composite sank 4.3%, its worst day since 2022.
Disappointment With U.S. Crypto Strategic Reserve
The March 6 executive order establishing the U.S. Crypto Strategic Reserve excluded immediate bitcoin purchases, triggering a 4% Bitcoin price drop and $650.80 million in crypto liquidations within the first 24 hours. The Crypto Fear & Greed Index hit 20 today, signaling extreme investor pessimism.
Crypto Investment Outflows
Crypto investment products saw $876 million in outflows for the week ending March 7, totaling $4.75 billion over four weeks. Assets under management fell to $142 billion, reflecting a broad risk-off shift. Bitcoin alone accounted for $756 million in outflows.
Bybit Hack Fallout
The Feb. 21, 2025, hack of Bybit, which lost $1.46 billion to North Korean-linked actors, continued to destabilize crypto markets. The breach eroded trust in exchanges, prompting sell-offs and emergency loans to replenish reserves.
Market Volatility and Fear
Trump’s policies and his latest recession remarks amplified volatility. Tesla shares plunged 14%, while the S&P tech sector fell 4.2%. The S&P 500 entered negative year-to-date territory, marking a four-day losing streak.
The multi-pronged-market decline highlights interconnected risks from global policy shifts, investor sentiment, and cybersecurity threats, with both traditional and crypto markets reacting to a volatile geopolitical landscape.
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