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If we compare the notional value lost, the GDP of only eight countries exceeds the decline in the crypto market in less than three quarters. Countries like Canada and Italy have a GDP of just over $2 trillion, while Brazil’s GDP is $1.83 trillion.
The total market capitalization (m-cap) of the digital market is slightly above the $1 trillion mark, from over $3 trillion at its peak in November 2021.
Bitcoin, the largest crypto token, is barely above the $25,000 level. It has lost more than 20 percent over the weekend, with its market capitalization falling below $500 billion, or half a trillion.
Its largest peer, Ethereum, has barely managed to hold the $1,300 mark, with a total valuation of a little over $160 billion.
Both coins are down about 70 percent from their peaks. Bitcoin dominance has been around 47.25 percent of the total market cap, indicating that there are only a few billion dollars left with the value of altcoins.
Market participants have closely linked the weakness of the cryptocurrency market to the traditional asset class.
Shivam Thakral, CEO, buy ucoin Financial markets around the world have seen a sharp decline, said the Consumer Price Index after reporting the highest inflation since 1981. He added that rising food, gas and energy prices are putting tremendous pressure on the crypto market.
“The market is expected to remain volatile in the coming weeks and the world will continue to report higher inflation numbers.”
Andy Lian, President, Beginning Exchange Said that the weakness has been exacerbated by traditional institutions that were here only for short-term gains. He said the quick outflow of money made us high and dry.
“We saw a global economic slowdown amid inflation and war, resulting in weak demand. There are liquidity issues and this could result in unstable annual percentage yields.”
Among Altcoins, curve dao token, Nexo, Phantom, Stepan, Waves, Kava and Thorchen have taken big hits. These tokens are down 20 per cent in the last 24 hours.
On a weekly basis, Convex Finance, Apcoin, Avalanche, Near Protocol, Axis Infinity, harmony And the graph has declined by 35-50 percent. The bulk of this improvement has been seen this weekend.
Belfrix Group founder and CEO Praveen Kumar said volatility in the market will continue, which will have a significant impact on the valuations of coins including Ripple, Cardano, Tether, Solana, among others.
Lian of Bigon Exchange said the recovery will not be anything too soon based on current market sentiments and data. “This could be the start of another crypto winter that could last another 2 years,” he adds.
On the other hand, some experts are suggesting investors to buy dips to average out their cost and make profit over the long term. Going forward, I believe volatility will continue and there will be extreme pressure on Bitcoin and other major altcoins as well, said Kumar of Belfrix,
Thukral of BuyUcoin said that the current fall in crypto prices allows investors to buy crypto at 2021 prices and we expect experienced investors to take advantage of the fall.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)
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