The sell-off in cryptocurrencies deepened even further on Wednesday, with bitcoin sinking below $20,000 for the first time since December 2020.
This is a remarkable fall from its all-time high price of nearly $69,000 in November — and a 70% drop that most observers attribute to worsening macro-economic conditions, such as rising inflation and interest rates.
The total market cap of all crypto assets slipped below $1 trillion for the first time on Tuesday, after exceeding that threshold in February last year. According to market tracker Coinmarketcap, the crypto market cap was $970 billion yesterday.
According to an ET report, Bitcoin was hovering around $20,166, down about 10% for the day, and Ethereum was down 37.5% in the last seven days.
Bitcoin and other crypto-assets have lost 30-40% of their value in the last seven days, according to reports. The crypto market had reached new highs in 2021, amidst a historic bull run.
Read more: Pakistan can generate $90 million per year by imposing 15% tax on crypto trading
Last November, the market capitalization of cryptocurrency surpassed $3 trillion. And now, its decline has pushed it below the $1 trillion level, signaling a staggering market cap drop of nearly $2 trillion in the last eight months.
According to ET, the continuing decrease in crypto this year is due to increased investor nervousness amid record inflation in the United States and the prospect of further interest rate hikes by the Federal Reserve to battle it.
During early morning Asian trade yesterday, bitcoin hit its lowest point in 18 months. According to Bloomberg, Bitcoin, the world’s largest digital token, has dropped as much as 8.9% to $24,903.49, its lowest level since December 2020.
Last month’s downfall of the Terra/Luna ecosystem, as well as one of the largest crypto lenders, Celsius, suspending withdrawals yesterday morning (Asian time), have reportedly weakened trust in the global crypto industry.
As a bigger sell-off persisted, other cryptocurrencies including as Ethereum, BB, Cardano, Ripple, Solana, Dogecoin, Shiba Inu, Avalanche, and others fell in value.