Crypto Crash: Market Under $1 Trillion, Bitcoin Under $19,000 – TheStreet
The beginning of September is starting to look like June in the cryptocurrency market.
Worried about the uncertainties surrounding the monetary policies of central banks to fight inflation at record levels in several decades, investors seem to be somewhat overwhelmed by panic.
They liquidate risky assets in anticipation of a possible recession. Indeed, the aggressive rise in interest rates by the Federal Reserve (Fed) could cause a hard landing in the economy, or a recession, have already warned economists. The soaring cost of borrowing money is negative for risky assets that give no guarantee of return on investments.
The European Central Bank (ECB) is expected to raise its interest rates at the end of its monetary meeting on September 8, amid mounting concerns about the region's economy.
The equity markets are not experiencing any respite: the S&P 500 lost 0.4% during the last session, while the Nasdaq 100 fell 0.7%. Cryptocurrencies which have been evolving for several months in tandem with the stock market are also in decline.
Market valuation thus fell back below $1 trillion to $983 billion, down 6.1% in the past 24 hours, according to data firm CoinGecko. This is a level that hasn't been seen since June. Last November, the crypto market set an all-time high of $3 trillion.
Bitcoin (BTC), the largest cryptocurrency by market value, is now trading below the symbolic threshold of $19,000. At the time of writing, BTC was trading at $18,754.87, down 6% in the past 24 hours. The most popular of the coins is now approaching the $17,600 threshold where it sank during the June crash as the crypto industry was in the midst of the liquidity crisis affecting prominent lenders like Voyager Digital, Celsius Network and the hedge fund Three Arrows Capital or 3AC.
The BTC has lost almost 73% of its value compared to its all-time high of $69,044.77 set on November 10.
It is also the decline in altcoins. Ether (ETH), the native token of Ethereum, is down more than 9% in the last 24 hours at $1,514.65, despite the cryptocurrency being at the center of a major event in the crypto industry. Indeed, Ethereum, considered as the internet of the crypto sector because almost all projects are developed there such as nonfungible tokens (NFTs), decentralized finance apps (dApps), must go through a software update scheduled for September 15th. This event, called the Merge, should attract investors to the industry if all goes well, experts say.
The Merge will in particular substantially reduce transaction costs, speed up and streamline these operations and considerably reduce the electricity consumption of the validation system for these same transactions.
Most tokens attached to promising decentralized finance (DeFi) platforms were also down sharply. Cardano (ADA) was down 7.3%, Solana (SOL) was down 7% and Polkadot (DOT) was down 9%.
The meme coins were also down sharply in the last 24 hours: Dogecoin (DOGE) lost 6.3%, while its rival Shiba Inu (SHIB) fell 5%.