Bombay: The total market capitalization of all crypto assets fell below $1 trillion for the first time since breaching that level for the first time last year. The crypto market cap stood at $970 billion at 2.50 pm on June 13, according to market tracker coinmarketcap.com.
Bitcoin was around $24,426, almost 12% down for the day, while Ethereum was below $1,240, more than 16% down. The prices of bitcoin and other crypto-assets are down 20-40% in the past seven days.
The crypto market hit new peaks in 2021 amid a historic bull run. It breached $3 trillion in market cap last November after surpassing $1 trillion in February.
The sustained decline in crypto this year comes on the back of heightened investor fear amid record inflation in the US and the expectation of more interest rate hikes by the Fed to combat this.
Praveen Kumar, founder and CEO, Belfrics said in a statement, “A sharp rise in the inflation figures of the US triggered one more staggering crash across the crypto markets. Both Bitcoin and Ethereum, two of the largest cryptocurrencies as per market capitalization, fell by close 8-9% and have corrected by almost 50% from their all-time highs. With inflation figures on the rise, we are witnessing massive sell-offs from the investors as they intend to stay away from such markets.”
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Experts said a further decline is expected before upward momentum returns. “We are seeing unsustainable financial designs unwind in crypto leading to decline in activity, volumes and pricing, amid a challenging macro environment for financial assets. However, there are still many positives in crypto this time. We expect the industry to survive but with a major clean-up of weak and unsustainable actors. Investors have been on the sidelines waiting for a clear signal that the market has bottomed,” Gautam Chugani, managing director, AB Bernstein, told ET.
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