Crypto crash: Market below $1 trillion, Bitcoin below $19,000
The beginning of September is starting to look like June in the cryptocurrency market.
Worried about the uncertainty surrounding the monetary policy of central banks to combat inflation at record levels for decades, investors appear to be somewhat overwhelmed by panic.
They liquidate risky assets in anticipation of a possible recession. In fact, the aggressive rate hike by the Federal Reserve (Fed) could lead to a hard landing in the economy, or a recession, economists have already warned. The sky-high cost of borrowing money is negative for risky assets that offer no guarantee of return on investment.
The European Central Bank (ECB) is expected to raise interest rates at the end of its monetary meeting on September 8, amid growing concerns about the region’s economy.
The stock markets are experiencing no respite: the S&P 500 lost 0.4% during the last session, while the Nasdaq 100 fell 0.7%. Cryptocurrencies that have developed for several months in step with the stock market are also in decline.
Altcoins are down sharply
The market capitalization thus fell back below $1 trillion to $983 billion, down 6.1% in the last 24 hours, according to data company CoinGecko. This is a level not seen since June. Last November, the crypto market hit a record high of $3 trillion.
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Bitcoin (BTC), the largest cryptocurrency by market cap, 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 last 24 hours. The most popular of the coins is now nearing the $17,600 threshold where it sank during the June crash when the crypto industry was in the middle of a liquidity crisis that affected prominent lenders such as Voyager Digital, Celsius Network and hedge fund Three Arrows Capital, or 3AC.
BTC has lost nearly 73% of its value compared to its all-time high of $69,044.77 set on November 10.
There is also the decline in altcoins. Ether (ETH), the native symbol of Ethereum, has fallen more than 9% in the last 24 hours to $1,514.65, despite the cryptocurrency being at the center of a major event in the crypto industry. In fact, Ethereum, considered the internet of the crypto sector because almost all projects are developed there, such as non-fungible tokens (NFT), decentralized finance apps (dApps), has to go through a software update scheduled for September 15. This event, called the merger, should attract investors to the industry if all goes well, experts say.
In particular, the merger will significantly reduce transaction costs, speed up and make these operations more efficient and significantly reduce the power consumption of the validation system for the same transactions.
Most tokens linked to promising decentralized finance (DeFi) platforms also fell sharply. Cardano (ADA) was down 7.3%, Solana (SOL) was down 7% and Polkadot (DOT) was down 9%.
Meme coins also fell sharply in the last 24 hours: Dogecoin (DOGE) lost 6.3%, while rival Shiba Inu (SHIB) fell 5%.
