Why are Bitcoin and Ether down so much: Crypto winter or liquidity reset?
The Trump administration has created a more constructive backdrop for cryptoassets in the US, and therefore globally. Trade tensions in April sparked a selloff but recovery, as with stocks, was swift.
On 10 October renewed US-China trade tensions sparked a broad selloff in risk assets that forced a cascade of selling as leveraged positions were forced to liquidate longs.
Since then it looks like liquidity in crypto markets has dried up even as the stock market in the US has rallied to fresh all-time highs. By contrast, Bitcoin and Ether ETF flows have dried up. The question is whether crypto markets are acting as a higher beta proxy for risk that is a leading indicator for stocks, which seem to have benefitted from a rotation…
