Crypto Market Hits Hard as Bitcoin and Ethereum Drop After Trump Incident

Crypto Market Braces for Key Federal Reserve Decision as Bitcoin and Ethereum Drop

Crypto market experienced significant losses over the weekend, following a second assassination attempt on former U.S. President Donald Trump. At the time of writing, Bitcoin (BTC) has dropped 2.1% to $58,950, while Ethereum (ETH) has fallen approximately 4.2% to $2,315 during Monday’s European trading session.

Details of the Trump Incident

The shooting incident occurred at Trump International Golf Club in Florida, where the Republican nominee was present. According to CNN, the Secret Service fired shots after spotting a rifle barrel protruding from a bush on the golf course. A suspect was later detained, and the FBI is continuing its investigation, adding to the geopolitical uncertainty affecting the market.

Federal Reserve’s Upcoming Decision and Market Focus

With a crucial monetary policy decision by the U.S. Federal Reserve looming later this week, market attention is also shifting towards DeFi (Decentralized Finance) lending markets. A Bernstein report released on Monday highlighted the potential for rebuilding DeFi lending on the Ethereum mainnet. “With a rate cut likely around the corner, DeFi yields look attractive again. This could be the catalyst to reboot crypto credit markets and revive interest in DeFi and Ethereum,” Bernstein noted.

Impact on Ethereum and Institutional Interest

The report also suggests that revitalizing DeFi lending markets could attract large whales and institutional investors back into the crypto credit markets. This move might address Ethereum’s underperformance relative to Bitcoin. “Unlike Bitcoin, which serves as a store of value and is influenced by supply and demand, Ethereum’s growth is driven by the usage of its underlying network, with DeFi markets being the largest use case,” analysts stated.

Institutional Interest in Crypto ETFs

Recent data from SoSo Value indicates renewed institutional interest in crypto ETFs, particularly Bitcoin-related products. Fidelity’s Bitcoin ETF (FBTC) saw inflows of $102.09 million, while Grayscale’s GBTC recorded $6.66 million in inflows. Ethereum-related ETFs showed mixed results, with Grayscale’s ETHE experiencing an outflow of $7.36 million, contrasting with BlackRock’s ETHA, which posted a net inflow of $3.67 million.

Upcoming Key Events

As the third quarter draws to a close, the crypto market is preparing for a pivotal week. The Federal Reserve’s interest rate decision on Wednesday is highly anticipated, with markets divided over the possibility of a 25 or 50 basis point rate cut. Other important events include the Bank of Japan’s first meeting since its rate hike, scheduled for Friday, U.S. initial jobless claims data on Thursday, and the Bank of England’s rate decision on the same day.

Market Sentiment and Investor Reactions

Avinash Shekhar, Co-Founder and CEO of Pi42, commented to Decrypt, “Bitcoin’s 3% drop comes amid investor uncertainty following the Trump assassination attempt, leading to over $116 million in liquidations. All eyes now turn to the Fed’s interest rate decision.”

The crypto market is navigating through a turbulent period, with geopolitical events and upcoming financial decisions contributing to its volatility.

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