Crypto Market Loses Over $200B in Massive Cryptocurrency Sell-Off
According to estimations from the CoinMarketCap price-tracking website, a major sell-off in cryptocurrencies doled out over $200 billion in just 24 hours.
TerraUSD stablecoin’s collapse triggered a drop in the crypto complex, which has impacted the big tokens pretty hard. Bitcoin fell as much as 10% to its lowest level since December 2020 on the last day, while Ethereum fell as much as 16%. Bitcoin went below $26,000 for the first time in 16 months, part of a bigger cryptocurrency sell-off that saw the entire market lose more than $200 billion in a day.
According to Coin Metrics, the price of bitcoin fell to $25,401.29 on Thursday morning. It is the first time the cryptocurrency has dropped below $27,000 since December 26, 2020. Bitcoin has already recovered some of its losses since, and was recently worth $29,413.08 (down 0.1%).
Ether, the second-largest digital currency, fell to $1,704.05 per token.
This is the first time the token has dropped below $2,000 since June 2021.
Ether was last trading at $1,988.45, down 6.5%.
Investors are deserting cryptocurrencies at a time when the markets have dropped from coronavirus pandemic highs owing to concerns about growing prices and a meagre economic outlook.
Prices for goods and services in the United States rose 8.3% in April, above analysts’ expectations and approaching the highest level in 40 years.
As central banks are tightening monetary policy to fight inflation, digital tokens have come under tremendous selling pressure as investors are fleeing risky assets. Thursday, S&P 500 futures fell 0.8%, matching declines in the MSCI Asia Pacific Index.
Fears of market contagion arose as a result of Terra’s demise. Tether, the world’s largest stablecoin, too fell below $1 on Thursday, falling to 95 cents at one point. Economists have been worried for a long time that ZTE might not have reserves enough to keep its dollar peg afloat in the event of large withdrawals.
Investors in the crypto industry are used to huge market fluctuations, and Bitcoin and Ethereum rapidly reduced losses to trade down 4.2% and 9%, respectively, as of 4:45 p.m. Hong Kong time.