UPDATE: Bitcoin plunges below $50,000, ether under $2,200 amid Jump Crypto moves, US election uncertainty

Bitcoin plunged to its lowest level since February, while ether traded down below $2,200 on early Monday morning EST amid a broad crypto market selloff, as investors reacted to various news events, including macroeconomic updates, Jump Crypto’s asset movements and the increasing odds of Kamala Harris winning the upcoming U.S. election against pro-crypto Donald Trump.

Bitcoin dropped 16.53% over the past 24 hours to trade at $49,883, its lowest level since February, according to The Block’s crypto price page. Ether also fell to its lowest level since January, losing 23.75% to trade at $2,186, the data shows.

Among other top 10 crypto tokens by market cap, BNB dipped 22.8% and XRP dropped 19.8%. The entire crypto market is down 18.2% in the past day, The Block’s data showed.

“Unlike previous times, this market feels ETH-led, instead of BTC-led,” Justin d'Anethan, head of APAC business development of crypto market maker Keyrock, told The Block. “This of course comes as ETH ETF trade and large investors unwind their ETHE (Grayscale ETH Fund) positions.”

Min Jung, an analyst of Presto Research, said that the decline in bitcoin and ether can be attributed to several factors. 

“First, the payroll numbers released last Friday were significantly lower than expected, with only 114,000 jobs added. This has heightened recession fears, leading to a 2.43% drop in the Nasdaq and a 1.84% drop in the S&P 500,” Jung added. News over the weekend that Warren Buffett's Berkshire Hathaway sold nearly half of its Apple Inc. position during the second quarter could also add further pressure to the equities market.

Stock market sell-offs appear to be spreading globally, as Japan’s Nikkei 225 and Topix indices plunged about 7% in the morning in Asia and are now nearing bear market territory, CNBC reported. This came after the Bank of Japan raised its key interest rate last week to about 0.25% from a range of zero to 0.1%.

Also, over the weekend, Jump Crypto, the crypto arm of Jump Trading, appeared to start moving hundreds of millions of dollars worth of crypto assets, including ether and USDT. This led many to speculate that the firm might be liquidating its crypto holdings amid a U.S. Commodity Futures Trading Commission investigation.

“Jump Trading has been transferring ETH to a centralized exchange amid rumors that they may be forced to exit the crypto business due to a CFTC investigation,” Jung said.

US election uncertainty

Meanwhile, the upcoming U.S. presidential election is becoming a source of uncertainty for crypto investors, as U.S. Vice President Harris started seeing growing approval.

Decentralized prediction platform Polymarket’s election poll currently predicts that Harris has a 45% chance of winning, rising from around 30% at the time Biden dropped out and endorsed Harris as his successor.

While Trump is a strong proponent of crypto, Harris has yet to match his support for the industry. However, the Harris campaign reportedly added David Plouffe, a former member of the Binance Global Advisory Board and global strategic advisor for Alchemy Pay, as part of the team’s crypto outreach efforts.

Jeff Dorman, the chief investment officer of crypto asset management firm Arca, wrote in a post on X that more support for Harris is “bad for crypto.” 

“Even if Democrats are less evil towards crypto, the entire equity and crypto market is favoring a Trump win,” said Dorman.

Jung of Presto said that the Trump rally is “no longer driving market sentiment,” and that “polls suggest that Harris’s winning odds have hit an all-time high.”

“Investors are looking for more clarity on the Jump Trading situation, election predictions, and whether there will be dip-buying at these levels,” Jung added.

Keyrock’s d'Anethan also said that on a broader time horizon, “the rate environment along with the likelihood of a Trump win” and that investors will also “keep an eye on Mt. Gox redemptions which have also been weighing down on crypto markets and add fuel to the fire.”

Updated (2:50 a.m., Aug 5, EST) the story throughout to reflect the latest prices.