The cryptocurrency market experienced a sharp downturn as Ether plunged to its lowest point in over a year, leading a broad selloff across digital assets. The second-largest cryptocurrency fell more than 10% to US$1,593 on Friday, a level not seen since April 2025. Bitcoin also dropped as much as 4.9% to just above US$60,438 before paring some losses.
Privacy Coins Hit Hardest
Smaller cryptocurrencies suffered even greater losses, with privacy coins taking a severe hit. Zcash plummeted by more than half in a 24-hour period, marking its largest single-day drop since May 2021, following reports of a potential security flaw. Monero declined as much as 17% during the same period.
The Zcash Foundation disclosed on Wednesday that it had taken emergency action after discovering a critical bug that could have allowed attackers to create new tokens arbitrarily. In a blog post, the foundation stated it found no evidence of unauthorized value creation, but the news rattled investors.
Market Factors Driving the Selloff
The crypto rout extends Bitcoin's longest losing streak since August. The decline began after Strategy Inc. announced on Monday it had sold a small amount of Bitcoin for the first time since 2022. Sustained outflows from U.S. exchange-traded funds (ETFs) dedicated to crypto, combined with a decoupling from record-breaking tech stocks, have eroded investor confidence.
Caroline Mauron, co-founder of Orbit Markets, noted that Bitcoin is approaching the psychologically important level of US$60,000. "The level proved a strong support in February and was last seen in 2024 before Trump's election, so a clean breach is going to be damaging," she said.
Tech Stocks Outperform Crypto
The crypto slump comes as U.S. stocks moved toward a historic weekly run of gains, fueled by the artificial-intelligence trade that has boosted technology valuations. Traders are now eyeing U.S. employment data set for release later Friday, which could provide clues ahead of next week's Federal Reserve meeting.
Dean Chen, an analyst at crypto exchange Bitunix, commented: "As global capital continues to flow toward AI and large-cap technology stocks, digital assets must compete with these high-growth sectors for investor allocation. However, if investors eventually begin to question the sustainability of U.S. equity valuations, the pace of capital rotation and risk repricing could unfold far more rapidly than markets currently anticipate."
Privacy Tokens: From Bright Spot to Rout
Privacy coins like Zcash and Monero had been a relative bright spot in the crypto market since the sector began a significant selloff in October. Their appeal lies in their ability to obscure transaction data on blockchain networks, making it harder to track flows and identify participants. Until Wednesday, Zcash had been up nearly 20% for the year.
The collapse of Zcash followed a Gizmodo report that the project took emergency action after discovering a critical bug. The Zcash Foundation said it found no evidence of unauthorized value creation but did not immediately respond to requests for further comment.
The broader crypto market remains under pressure as investors weigh the impact of ETF outflows, regulatory uncertainty, and competition from traditional tech stocks.
