4 Big Reasons Why Crypto Is Crashing Today: Full Breakdown & What Next

The global crypto market is once again in red. Today, the total market cap dropped by 5.2%, now standing at $3.39 trillion, while daily trading volume shot up to $174 billion, as per CoinGecko. Bitcoin dominance is at 61.6%, and Ethereum’s is 9.03%.

This sudden dip has left many investors asking: Why is crypto crashing today?

Four Big Reasons Behind the Crypto Market Crash

The drop in the market is not random. There are four key reasons behind today’s big fall:

Middle East Conflict – Israel vs. Iran : According to reports from June 13, Israel launched airstrikes on Iran's nuclear sites . This sudden tension in the Middle East spooked investors around the world. History shows that during such conflicts, investors shift their money to safer options like gold.

Source: X

And that’s exactly what happened— gold went up by 5% , while Bitcoin fell nearly 3% in a few hours . This pattern is similar to what we saw in the 2020 U.S.-Iran standoff.

FSB Warning About Crypto and TradFi Ties: The Financial Stability Board (FSB) released a statement warning about the increasing connection between crypto and traditional finance ( TradFi ). FSB Chair Klaas Knot pointed out that with crypto ETFs becoming more popular and stablecoin issuers holding large amounts of U.S. Treasury bonds, the risk of a major market issue is rising. These deepening ties could be dangerous and might trigger more crashes if not monitored well.

Bitcoin Whale Dumping Coins : Data from Lookonchain shows that a big Bitcoin whale (address: 12d1e4) just deposited another 1,000 BTC ($106 million) to Binance—just two hours ago. This same whale has already sold 6,500 BTC worth $585 million since April 2024 .

Source: X

He still holds 3,500 BTC worth over $363 million . This shows that even big players are selling , causing panic among retail investors. At the time of writing, Bitcoin was trading at $104,953.54 with $2.08T in 24-hour trading volume.

Trump's Tariff Plans May Increase U.S. Inflation: Former U.S. Treasury Secretary Janet Yellen recently warned that Donald Trump’s new tariff proposals could raise inflation by 3% . This would mean higher prices and less money in people’s hands. Since inflation and interest rates are closely linked to investment behavior, these fears are also affecting cryptocurrency sentiment.

What's Next? Fear Rises as Experts Issue Fresh Warnings

With so much bad news around, it’s not surprising that investor sentiment is dropping fast.

• The Fear and Greed Index —a popular tool used to check investor mood— dropped from 71 (Greed) to 61 , which means people are getting nervous.

• Just last week, the index showed Fear at 45, so this change shows how quickly moods shift during uncertain times.

Meanwhile, voices like EGRAG Crypto and Robert Kiyosaki are also warning that bigger troubles could be ahead . Kiyosaki has often warned about crashes in the market and continues to tell his followers to stay alert. These kinds of statements affect how small and big investors make decisions.

Conclusion

The remainder of the coming days remains uncertain, particularly in case tensions on the global scene heighten and whales remain active. Investors should remain wary and take no impulsive actions. The market remains unstable, and anything from a peace notification or a governing decree can flip prices once more. For the meantime, this is a wake-up call that even in a good bull rally, crypto is never risk-free.

Disclaimer: For information purposes only, and do your own research before investing in anything.