Gold and Silver Drop With Crypto: What's Behind the $1.7 Trillion Wipeout

More than $1.7 trillion was wiped out across precious metals and crypto markets in a single day. Gold fell 4.75% to $4,100 an ounce. Silver slid 9% to $63. Bitcoin dropped roughly 12% over four days, dragging Ethereum and XRP lower.

Yen weakness triggered a wave of carry-trade unwinds, traders said. The yen depreciated against the dollar, forcing speculators to close leveraged positions in risk assets. Precious metals and crypto were caught in that unwind. The same pattern rattled crypto during past yen carry-trade episodes.

In crypto, additional selling pressure came from disappointment over the CLARITY Act. Lawmakers ruled out a July 4th signing. Sprint meetings next week aim to finalize details before the August recess. Some analysts said the market sold off partly on the delay. They said the bill's passage remains likely.

SpaceX shares added to the mix. After hitting a high of $225 on Tuesday, the stock fell roughly 24%. Some traders speculated that capital rotated out of crypto into the SpaceX dip. That link was speculative and unconfirmed, they said.

Strategy's preferred stock, STRC, worried investors. If the company needs to sell Bitcoin to cover losses tied to STRC, that could add selling pressure, analysts said. Strategy holds a large Bitcoin treasury. Any forced selling would pressure prices.

Miner selling is also weighing on crypto. JPMorgan said Bitcoin has traded below its estimated production cost for five consecutive months. Roughly 20% of miners are unprofitable. Public miners sold over 32,000 BTC in the first quarter to fund operations, according to JPMorgan. Smaller private miners face similar pressure.

The next catalyst for crypto is next week's CLARITY Act meetings. For gold and silver, the yen and carry-trade dynamics remain in focus. Yen weakness could keep the risk-off tone.