Expect a crypto rebound after Monday’s crash: Binance

While cryptocurrency assets – perhaps not unexpectedly – followed the market into sharp decline during Monday’s crash, Binance Australia/NZ chief Ben Rose argues the crypto retreat was “not indicative of a long-term negative trend” and that digital currencies will soon rebound and again deliver outsized growth.

After cryptocurrency assets followed the market into sharp decline during Monday’s crash, Binance Australia/NZ chief Ben Rose says the crypto retreat is “not indicative of a long-term negative trend” and that digital currencies will soon rebound and deliver outsized growth.

Despite their inherent volatility, cryptocurrency assets have “historically demonstrated resilience” and have typically “rebounded after periods of decline”, said Rose, who heads the Australian division of the world's largest cryptocurrency exchanges by trade, in a statement on Tuesday.

He further noted that, on a year-to-date basis, Bitcoin has still appreciated by approximately 27%.

Crypto assets took a substantial hit at the beginning of this week, with the top crypto tokens seeing double-digit declines. According to Binance data, the total market capitalisation for cryptocurrencies decreased by nearly 20 per cent – from $USD2.16 trillion to $USD1.76 trillion.

The world’s biggest cryptocurrency, Bitcoin, fell by nearly 18 per cent on Monday from the previous day’s high, in its sharpest retreat since 2022 – from AU$93,723 to AU$76,900 per coin.

Meanwhile, Ethereum, the second most traded cryptocurrency, lost 22 per cent of its value in this time.

Overall, the ASX 200 fell 3.6 per cent on Monday from its Friday close of day price of 7,936.

The fall was largely attributed to unfavourable jobs data coming out of the US, as well as Japan’s first policy rate rise in 17 years, which saw the target rate lift above 0 per cent and ushered in a mass asset sell-off of Japanese stocks.

Bitcoin has since clawed back 12 per cent from its 5 August low of AU$76,900, hitting AU$86,142 on Tuesday.

According to Binance, the downturn in crypto asset values echoed the broader market's sharp retreat, “with rising fears of a global economic slowdown triggering a risk-off sentiment that has impacted various asset classes, including cryptocurrencies”.

It added: “The market uncertainty triggered significant liquidations, with over $US819 million in liquidations occurring on 5 August, marking the highest daily volume since 13 April 2024, ahead of Bitcoin’s halving event.”

While the current decline is notable, Rose said the cryptocurrency market has historically “demonstrated resilience and recovery following periods of correction”.

“We do not view this downturn as indicative of a long-term negative trend for the crypto market. It is worth remembering that on a year-to-date basis, Bitcoin has gone up approximately 27 per cent,” he said.

According to Rose, there remains “significant potential for market fluctuations in both directions”, with an expected interest rate cut from the Fed and economic and political dynamics in the US.

“Bitcoin and the wider crypto market continue to hold long-term potential and we encourage investors to stay informed about ongoing developments,” he concluded.