(Seoul=Yonhap Infomax) Kyung Pyo Hong – The recent sharp decline in Bitcoin prices is exacerbating selling pressure in equity markets, according to analysts.


On the 23rd (local time), Ed Yardeni, President of Yardeni Research, stated, "One of the reasons for the equity market sell-off is the plunge in Bitcoin prices."


He added, "The steep drop in Bitcoin may prompt some investors to liquidate their stock holdings."


Bitcoin is currently experiencing its worst sell-off since 2022, with prices down more than 30% from recent highs.


This has sparked liquidity concerns, as investors are selling equities to cover leveraged long positions.


Steve Sosnick, Chief Strategist at Interactive Brokers, commented, "As Bitcoin losses accumulate, investors may need liquidity to meet margin calls."


He further analyzed, "A collapse in Bitcoin adds significant vulnerabilities to the system."


There is also analysis that algorithmic traders, who use Bitcoin as a barometer of risk sentiment, have accelerated equity selling as cryptocurrency prices tumbled.


"Bitcoin is being used as a proxy indicator for speculative fervor," Sosnick explained. "So, whether rational or not, capital allocation is being based on that indicator."


Salman Ahmed, Global Head of Macro at Fidelity, noted, "Cryptocurrencies have acted as a canary in the coal mine, signaling risk."


As of 24 hours ago, Bitcoin was trading at $86,936, up 2.66%.

Bitcoin Chart
[Source: Yonhap Infomax]


kphong@yna.co.kr

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