The cryptocurrency market has suffered its most devastating crash in over a year, with $510 billion wiped out from total market capitalization. Over 60% of the top 50 cryptocurrencies have now lost all gains made since the beginning of 2024.
CryptoQuant analyst Binhdangg highlighted the scale of the collapse, stating in an Aug. 6 post on X (formerly Twitter):
“After Black Monday, 60% of coins in the top 50 have removed all profit since the beginning of 2024 and even get losses.”
The sell-off has pushed leading cryptocurrencies into dangerous territory, with Ethereum (ETH) briefly dropping below $2,200, a five-month low. Analysts warn that losing this psychological support level could trigger further panic selling across the market.
What Triggered the $510B Crypto Crash?
Several macroeconomic and industry-specific factors combined to drive the market downturn.
On Aug. 5, the Bank of Japan announced an interest rate hike from 0% to 0.25%, impacting global financial markets. Many investors borrow Japanese yen at low interest rates to invest in U.S. stocks and crypto, so the policy shift led to widespread asset liquidations.
Simultaneously, major crypto market makers dumped massive amounts of Ethereum, accelerating the sell-off. Since Aug. 3, top firms have offloaded 130,000 ETH worth $290 million, causing Ethereum’s price to plummet from $3,000 to under $2,200.
Among the largest sellers:
- Wintermute: Sold 47,000 ETH
- Jump Trading: Sold 36,000 ETH
- Flow Traders: Sold 3,620 ETH
This aggressive selling further weakened market confidence, intensifying the downturn.
Memecoins Suffer the Biggest Losses
Among the hardest-hit assets were memecoins, which rely heavily on retail speculation and social media hype.
- Dogwifhat (WIF), a Solana-based memecoin, recorded the biggest loss, crashing 41% in the past week. It was trading at $1.38 as of Aug. 6.
- Pepe (PEPE), the frog-themed token, fell 34% in a week and is now over 53% down from its all-time high in May 2024.
Since memecoins lack intrinsic value, they are especially vulnerable during market corrections, as investor sentiment shifts rapidly.
What’s Next for the Crypto Market?
Analysts warn that the downturn may not be over, with concerns that Bitcoin (BTC) could still revisit $42,000 if selling pressure continues. Meanwhile, Ethereum faces increased downside risks if it fails to reclaim key resistance levels.
With ongoing macroeconomic uncertainty and increasing sell-offs from institutional players, investors remain on high alert for further market turbulence.