In a move that sent ripples through both traditional and cryptocurrency markets, California Governor Gavin Newsom vowed to prosecute rioters in Los Angeles amid escalating social and political tensions. The announcement comes as a stark reminder of how non-financial events can serve as catalysts for sharp price swings in digital assets and related stocks or ETFs.
The impact on the crypto market was swift, with Bitcoin briefly dipping 2.3% to $68,500 before rebounding to $69,800 on June 10. Ethereum, the second-largest cryptocurrency by market cap, also felt the heat, dropping 1.8% to $3,650 as trading volumes surged 15%, reflecting heightened activity and initial panic selling followed by bargain hunting.
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The unrest in Los Angeles, fueled by anti-ICE sentiments, has put investors on edge, with many closely monitoring the situation for potential impacts on market sentiment. The deployment of 4,000 National Guards and 700 Marines, at an estimated cost of $134 million to American taxpayers, has only added to the uncertainty.
As tensions continue to simmer, crypto traders are advised to:
- Closely track socio-political developments
- Be prepared for potential market volatility
- Maintain a long-term perspective on their investments
While the long-term fundamentals of cryptocurrencies like Bitcoin and Ethereum remain strong, short-term volatility is likely to persist as long as social and political tensions remain high. As always, investors should exercise caution and do their own research before making any investment decisions in these uncertain times.
