The price of the flagship cryptocurrency Bitcoin (BTC) has dropped by nearly 10% over the past week to now stand below the $87,000 mark for the first time since Donald Trump became the President of the United States and led to a major cryptocurrency rally.
Other digital assets have seen their prices plunge over the same period, with ETH dropping 11% to $2,400 and XRP dropping 14.2% to $2.25 at the time of writing. Most top cryptocurrencies have lost between 15% and 18% of their value over the week, with Binance’s BNB standing out after a 5% loss.
In total, the cryptocurrency space’s market capitalization has dropped by nearly $300 billion from its peak last week, to now stand at $2.88 trillion.
- Crypto market crash impact on market cap. Source: CoinMarketCap
The cryptocurrency market drop can be attributed to a potential number of catalysts including growing geopolitical tensions and uncertainty surrounding the tariffs Trump is looking to impose.
Crypto Market Crash Comes Amid Equity Issuance Fatigue
Various publicly-traded companies have been issuing equity and debt to raise capital to accumulate bitcoin, helping push up the cryptocurrency’s price. Yet, Strategy recently raised $2 billion in a convertible note offering that included a reduced conversion premium.
That reduction came after a discounted pricing was offered on a preferred stock offering, showing that the company has to sweeten the deal for investors to keep on buying its debt and equity offerings.
Bank of America has found that these offerings got so large they account for roughly 19% of U.S. equity-linked issuance. Manoj Shivdasani, founder and head of research at GSR Research, noted that the lowered offerings “suggest that the market is experiencing MSTR/crypto fatigue,” according to Bloomberg.
Per Bank of America, approximately $17 billion have been raised through equity-linked products from companies directly linked to the space.
