The crypto market is now worth less than $950 billion compared to $3 trillion in November.
When is it going to stop?
The descent into hell or the return to earth of cryptocurrencies unfortunately continues for many investors who continue to see the value of their portfolio melt.
Bitcoin, the most popular digital currency, was down more than 6% to $21,229.59 in the past 24 hours. Prices briefly dipped to the $20,992.62 level before bouncing back a tiny bit, according to data from CoinGecko.
The fall is more than 32% in the last 7 days. Prices are now at their lowest since December 2020.
Given the general downward trend and the very volatility that characterizes the crypto industry, it is possible that prices will sink the psychological threshold of $20,000 in the next few hours.
In eight months, the value of Bitcoin has fallen by more than 69.2% compared to an all-time high of $69,044.77 reached on November 10. The only good news for the digital currency is that it alone still accounts for 43.5% of the total crypto market valuation.
The valuation of the market depends on the evolution of Bitcoin. It is therefore no surprise that the market which weighed just over $3 trillion at the beginning of November lost more than $2 trillion in the Bitcoin crash.
The crypto market was only worth $939 billion at the time of this writing, according to CoinGecko.
The reasons for the crash are the same: fears of recession are pushing investors to liquidate risky assets. Cryptocurrencies and tech groups are considered as such. And as experts anticipate an aggressive rate hike by the Federal Reserve to fight inflation, investors are opting for caution while waiting to see how things unfold.
In addition, two big scandals have chilled investors.
The first is the sudden collapse of sister tokens UST and Luna, despite their founders promising that their technology was solid and viable.
The second scandal is the decision by crypto lender Celsius Network to freeze withdrawals and other transactions from its platform.
“The current bear market is nos entering a phase aligned with the deepest and darkest phases of previous bears,” strategists at Glassnode wrote in a note. “The market, on average, is barely above its cost basis, and even long-term holders are now being purged from the holder base.”
Ether, a native token of the Ethereum platform, fell more than 9% to $1,117.92. Over the last 7 days, Ether, the second cryptocurrency by market value, has plummeted by 38.5%.
The fall is equally strong for the meme coins like Dogecoin and Shiba Inu. Dogecoin has lost 36% of its value over the last 7 days and Shiba Inu 28%.
It is also the stampede for the tokens of decentralized finance projects, or DeFi, supposed to replace traditional finance. Cardano, Solana, Polkadot, Avalanche coins are all down between 23% and 40% in the past seven days.