- Institutional capital outflow is responsible for the latest crash in crypto prices.
- Investors were pulling funds from crypto to invest in upcoming tech giant IPOs.
- The scheduled CLARITY Act decision will catalyze a rebound in the crypto market.
Head of Japanese financial conglomerate SBI Holdings, Yoshitaka Kitao, has attributed the latest crypto market crash to a massive outflow of institutional capital into fiat ahead of the upcoming IPOs of technology giants SpaceX, OpenAI, and Anthropic in the United States. However, he believes the scheduled US CLARITY Act vote will catalyze a market rebound and specifically boost Ripple and XRP fortunes.
A Purely Technical Situation
According to Kitao, the crypto market’s decline over the past few days is purely technical, amid stable industry fundamentals. He described the upcoming CLARITY Act decision and other anticipated regulatory outputs as large-scale restructuring events that will restore liquidity to digital assets once the wave of public listings is complete.
The SBI chief identified the unprecedented terms of Elon Musk’s SpaceX listing as the main reason behind the aggressive liquidity outflow. SpaceX targets a record $75 billion at a total business valuation of $1.75 trillion. It is worth noting that investors seem optimistic about this target despite the firm’s 2025 net loss of $4.94 billion.
Major Funds Are Targeting Mainstream IPOs
Kitao further explained that major funds are pulling money from the crypto industry to secure stakes in the decade’s most important technology assets. He emphasized that the development triggered an institutional rush that overshadowed the crypto market’s internal achievements.
Data from CoinGlass shows that the market exit by major players triggered the liquidation of margin positions of several retail crypto investors. For context, positions held by 267,467 users were forcibly closed over the past 24 hours for a total of $1.77 billion, of which $1.55 billion came from long positions.
Crypto Market Crash is Temporary
However, Kitao remains unmoved by recent events, insisting that the liquidations were triggered by an external fiat liquidity squeeze, not by internal systemic failures in crypto infrastructure. He believes the CLARITY Act’s potential effect, and Ripple’s ongoing alignment with the prevailing regulatory ecosystem, will determine the crypto market’s next dimension. One he thinks will be bullish for the entire ecosystem.
Related: Blockchain Association Requests Senate for Immediate Passage of CLARITY Act
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