The freefall in crypto token prices is sparking some concern about a spiral of selling pressure hitting other markets.
The worrying scenario is that investors, facing steep losses on their Bitcoin holdings, may sell other assets to shore up cash, adding momentum to the broad markets downdraft. That could potentially heap pressure on stock prices at a time when Wall Street seems to be saying AI valuations are detached from reality.
“We could see further downside risk for crypto as portfolio adjustments are made either by choice or to cover losses in equities,” said Nick Twidale at AT Global Markets.
For the moment, however, it’s more akin to a bear case than what’s actually happening in markets. Bitcoin pared losses this morning after its sudden slide below $90,000, and US futures are only slightly lower.
