**A $5.5 Trillion Market Shift: Stocks and Cryptocurrencies in Turmoil**
A staggering $5.5 trillion sell-off has sent both stocks and cryptocurrencies into a downward spiral. The Crypto Fear & Greed Index, which soared to an impressive 94 in November, plummeted to a mere 10 by February 27. This dramatic sell-off has left both markets in a state of freefall. Over the past two months, the S&P 500 has seen a decline of $4.5 trillion, while the cryptocurrency market has dropped approximately 19%. It appears that fear and uncertainty, rather than concrete financial data, are driving investors to withdraw their funds.
At the start of the year, optimism was high. On January 10, the total value of the crypto market was $3.23 trillion, and the S&P 500 was at 5,827.03. Since then, the crypto market has fallen by 18.90%, and the S&P 500 has decreased by 3.66%. The most significant decline began after February 20, when the downward trend accelerated.
The Kobeissi Letter, a financial analysis platform, points out a notable shift in investor sentiment. The Crypto Fear & Greed Index, which was at a high of 94 in November, has now dropped to just 10. The underlying reason for this market turmoil is clear: in the last two months, the S&P 500 and cryptocurrency markets have collectively lost a staggering $5.5 trillion in market capitalization. We are witnessing one of the most abrupt shifts in sentiment since 2020. What’s going on? Let’s break it down. (a thread) pic.twitter.com/uPh9qGWfa5 — The Kobeissi Letter (@KobeissiLetter) March 10, 2025
Currently, the index sits at 15, significantly lower than its reading of 82 from a year ago, according to CoinStats. This drastic change from optimism to fear has been a crucial factor in the market downturn.
Peter Orszag, CEO of Lazard, has shed light on the broader uncertainty affecting the markets, stating that the tariff disputes involving Canada, Mexico, and Europe are prompting corporate boards and executives to rethink their strategies. While some attribute the sell-off to tariffs imposed by former President Donald Trump, others believe that fear itself has become the primary driver behind the market’s decline.
Hedge funds have also been quick to respond. A report from Goldman Sachs indicates that institutional investors have pulled back from stocks at the fastest rate in over two years. Prior to the sell-off, exposure to tech stocks had already reached a 22-month low, reflecting a growing reluctance to take risks.
Major tech stocks, once the titans of the market, have suffered significant losses. Since the beginning of the year, several industry leaders have seen sharp declines. Apple (AAPL) has dropped 9.06%, Microsoft (MSFT) has fallen 9.63%, Nvidia (NVDA) has plummeted 20.34%, and Broadcom (AVGO) has recorded a 20.44% loss. Oracle (ORCL) has also experienced a 10.49% decrease.
Signs of market stress are becoming increasingly evident. The VIX index, which measures market volatility, has surged by 70% over the past month, indicating extreme uncertainty as traders prepare for further turbulence.
