Crypto Market Plunges Below $1T Amid Inflation-Driven Selloff – WORLD CRYPTO BUSINESS

Crypto Market Plunges Below $1T Amid Inflation-Driven Selloff

[ad_1]

Share this article

The total cryptocurrency market cap has fallen below $1 trillion for the first time since January 2021. 

Crypto in Crisis

Crypto investors appear to be rushing for the exit after more macroeconomic turbulence.

The crypto market has extended losses following Friday’s higher-than-expected consumer price index inflation. Over the weekend, Bitcoin dropped by 17.4%, registering a new yearly low of around $23,911. Ethereum, the second-largest cryptocurrency, fared worse, plummeting 27.3% in the same period.

Despite the Federal Reserve raising interest rates by a total of 75 basis points in 2022, inflation has shown little sign of letting up, making more aggressive rate hikes more likely going forward. By raising rates, the Fed hopes to bring inflation back down to an acceptable level by slowing economic growth. However, doing so negatively impacts risk-on assets such as equities and cryptocurrencies. 

Since the Fed first committed to raising rates earlier this year, the crypto market has shed over $800 billion in value. In March, the sector’s total market cap hovered around $1.8 trillion; now, data from CoinMarketCap shows that the asset class’ value has dipped below $1 trillion for the first time since January 2021. 

Total cryptocurrency market cap (Source: CoinMarketCap)

Bitcoin has historically held up better than other crypto assets during bearish market conditions, with this time being no different. Over the past month, Bitcoin’s market dominance has risen over 6%, indicating that investors are fleeing smaller and more volatile cryptocurrencies in favor of Bitcoin.

Elsewhere, the tech stock-heavy NASDAQ 100 has also been hit hard, with the index’s futures contracts sliding 3.1% in early hours trading. In recent months, crypto assets have expressed a high correlation with traditional equities. Ongoing weakness in the NASDAQ 100 and S&P 500 will likely add additional pressure on the already-ailing crypto market. 

While macroeconomic factors continue to weigh on the crypto market, sector-specific issues are also fueling bearish sentiment. Earlier today, the crypto lending platform Celsius announced it had frozen customer withdrawals, swaps, and transfers due to “extreme market conditions.” The development follows weeks of rumors that the crypto lender could face insolvency issues due to the decline in the crypto market.

Disclosure: At the time of writing this piece, the author owned ETH and several other cryptocurrencies. 

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

[ad_2]

Source

Recommended For You

About the Author: administrator

Leave a Reply

Your email address will not be published. Required fields are marked *