Bitcoin Plunges Below $56K as Stocks Sell Off in Weak U.S. Trading

During the Asian and European trading periods, Bitcoin’s value increased from a minimum of $56,000 after the U.S. presidential debate between Kamala Harris and Donald Trump, momentarily reaching $57,000 upon the release of the U.S. CPI inflation report. However, it fell to $55,600 within an hour after the opening of U.S. stock markets. Since then, Bitcoin has slightly rebounded, but it’s still down by 2% over the last 24 hours.

For several weeks, it has been noticeable that the value of Bitcoin and other digital currencies tends to decrease when the U.S. stock market opens, suggesting that American investors are adopting a more cautious approach towards risk.

Initially, U.S. stocks showed signs of weakness this morning. By 11 a.m. Eastern Time, the S&P 500 and the tech-heavy Nasdaq 100 were down approximately 1.6% and 1.3%, respectively.

As a crypto investor, I noticed an unexpected surge in the value of the Japanese Yen overnight, pushing it to 141 per US dollar. This is higher than its level in early August when its sudden appreciation forced a hasty unwinding of yen-carry trades, which seemed to be a significant factor in the recent turmoil in traditional and cryptocurrency markets.