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Black Monday For Crypto, Hits Global All Time Low

| Updated: June 13, 2022 16:38

This seems to be a Black Monday for crypto. Market watchers woke up to a crypto all time low this year. The global market cap shrunk to $1.02 trillion from $1.10 trillion recorded June 12.

The immediate trigger for the crypto crash appears to be a massive sell-off by investors amid heightened inflation fears. The trend suggests that investors are staying away from risky assets, as also evidenced in the stock markets.

“The crypto market has been under pressure from the Federal Reserve, hiking the interest rates to combat inflation over the past few months. Bitcoin, Ethereum, and most cryptocurrencies suffered losses over the weekend after a broad sell-off following the data showing US inflation hitting a 40-year high,” reasoned Edul Patel, crypto investment platform Mudrex, in an online assessment.

While Bitcoin, the biggest and most popular cryptocurrency, has fallen to $25,586 almost all altcoins, starting from Ethereum, are on a sharp dip since weekend. Ethereum has fallen to its lowest level in more than 14 months, trading currently at around $1350. Solana has fallen by almost 30% and is hovering around the $29 mark.

Experts say that the crypto price plunge indicate a falling risk appetite of investors. With all its uncertainties and volatilities, crypto is considered as one of the most volatile instruments for investment purpose.

“As investors seem to have panicked, the number of crypto liquidations has been high since Friday. Bitcoin and Ethereum plummeted as much as 7% each and are currently trading at their lowest at US$25,000 and US$1,300. The bearish trend may likely continue in the next coming days,” he added.

While altcoins have historically underperformed Bitcoin, this time they have an added pressure of potential regulatory roadblocks. A report by CoinDesk quoted an expert as saying that only a small number of altcoins are likely to survive such market movements.

Word of caution: Consumer price index reported the highest inflation since 1981. The market is expected to remain choppy in the coming weeks and countries around the globe continue to report high inflation numbers. The current dip in the crypto prices allows investors to buy crypto at 2021 prices. Only seasoned investors should take advantage of the dip.

Also Read: Oversimplified: Terra, Luna Crash Takeaways

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