Three-Day $500B Crypto Plunge & Morgan Stanley $BTC ETF Offering – Where Is Crypto Headed?

• The crypto market has lost over $500B in the biggest liquidation since August 2023.
• Bitcoin ($BTC) lost over $78M in liquidations, with Ethereum ($ETH) falling by 24% in the last 24 hours.
• Morgan Stanley becomes the first bank to offer spot $BTC ETFs to clients, opting for BlackRock and Fidelity.

The three-day $500B crypto crash is the biggest since August 2023, and over $272M have been liquidated between August 2-3.

Bitcoin lost nearly $78M in liquidations, including ~44M in long positions. This was likely caused by the stock market volatility.

$BTC is currently $50,600, and the crypto market cap is down by 14.21% to $1.85T (falling below $2T). Ethereum has also decreased by 24% to $2,216 in the last 24 hours.

On the upside, Morgan Stanley will become thefirst bank to offer spot $BTC ETFs (BlackRock and Fidelity). This could significantly boost Bitcoin's price and offer an institutional seal of approval.

Let's discuss these events and see where the crypto market is heading.

Biggest Crypto Dip in a Year - Over $500B Wipeout

The crypto market is dipping massively. Between August 2-5, the market lost over $500B, the largest three-day sell-off seen since August 2023.

Here are some of the largest crypto dumps in the last 24 hours:

• Ethereum (-24%)
• Polkadot (-23.48%)
• Dogecoin (-20.42%)
• Avalanche (-19.77%)
• BNB (-19.16%)
• Solana (-17.71%)
• Bitcoin (-14.66%)
• XRP (-17.51%)

The stock market isn't faring any better - a 4.4% dump in the S&P 500, with companies like Microsoft and Intel showingsubpar Q2 results, and the Nasdaq Composite Index falling by 2.9%.

CryptoMarketCap's Fear & Greed Index is at 41.51, still in the neutral area, but a far cry from the greedy 60-level five days ago.

The meme coin market is also suffering, with a 19% drop in the market cap and a 124% increase in the 24-hour trading volume (most are sell-ofs).

Let's see why this is happening.

What's Causing the Crypto and Stock Market Crash?

A major cause of this dump could be the current forecasts showing Kamala Harris' potential to surpass Trump in the polls, which could lead to more stringent crypto regulations.

Analyst Valentin Fournier of BRN also suggests the poor performance of $BTC ETFs as another reason for the dump. All $BTC ETFs are showing negative 24-hour trades.

Another potential reason could be the recent US employment data report on August 2, which shows e 4.3% unemployment rate.

Fears of a recession are also contributing to the crypto market's downfall, and the FBI's warning of crypto scammers on X might have also played a role.

The massive crypto liquidations showcase crypto's vulnerability to economic, political, and social unrest, and all are unnerving investors.

Morgan Stanley to Offer $BTC ETFs - Can This Save Crypto?

Despite the early success of $BTC ETFs, Wall Street banks like Wells Fargo, Goldman Sachs, and JPMorgan have kept mostly silent.

That has since changed - Morgan Stanley will start offering spot $BTC ETFs, according to two anonymous sources.

The ETFs in question will come from Fidelity and BlackRock. Last month, BlackRock's CEO Larry Fink admitted that Bitcoin is a legitimate' financial instrument.

Morgan Stanley will impose a $1.5M net worth restriction on clients who can solicit a $BTC ETF solicitation. They also mentioned an aggressive risk tolerance' and the desire to make speculative investments' as requirements.

Since launching in January,$BTC ETFs have leaped to $57.2B total net assets, with over $17.5B net inflows. BlackRock's IBIT is especially profitable, with $21.5B in net assets, becoming one of the fastest-growing ETFs on Wall Street.

With institutional backing on its ETFs, Bitcoin's price might surge, alongside the rest of the crypto market.

Is Bitcoin Dumping Further or Skyrocketing?

Given the current politico-financial climate, any prediction is uncertain. On the one hand, the US job market is getting worse, Kamala Harris' potential election sows fear among investors, and crypto liquidations are at their highest.

On the other hand, the crypto market has seen worse. Many HODLers and investors are certain we're still in an accumulation phase that will lead to a bullish run.

Furthermore, Morgan Stanley's listing of $BTC ETFs should bring the bulls back into the spotlight thanks to the institutional show of support.

ReferencesClick to expand and view sources

• Microsoft's costs in focus as fears rise over slow payoff from AI (Reuters)
• Top Memes Tokens by Market Capitalization (CoinMarketCap)
• Employment Situation Summary (US Bureau of Labor Statistics)
• FBI Issues Serious Crypto Warning Amid $300 Billion Bitcoin, Ethereum, Solana, BNB And XRP Price Crash (Forbes)
• Morgan Stanley tells wealth advisors they can pitch bitcoin ETFs in a first for a big bank (CNBC)

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