Crypto Market Is Falling and there is no relief in sight.
Over the course of the last weekend, the value of Bitcoin, Ethereum, and all of the other main cryptocurrencies continued their downward trend, wiping out the modest gains gained over the previous week.
The total value of all cryptocurrencies on the global market dipped below $1 trillion for the first time since February 2021, when it reached $998 billion.
The immediate cause of the drop in cryptocurrency prices seems to be a major sell-off by investors in response to heightened concerns about inflation. The fact that investors are continuing to avoid riskier assets is reflected not just in the bond markets but also in the stock markets.
It wasn’t limited to Bitcoin and Ethereum alone. Over the course of the last week, every single one of the top 20 currencies ranked by market cap has seen a decline of double-digit percentages.
Why Markets Are Dipping
The rising costs of food, gas, and energy are believed by some industry specialists to exert tremendous pressure on the cryptocurrency market. This theory is based on the fact that both Bitcoin and Ether have experienced losses in the double digits over the course of the last 24 hours.
After a tremendous bull run in 2020 and 2021, the crypto market has been unstable all year, but the current Crypto Winter started in May when major currencies plummeted with the stock market.Â
Lately, tech stocks and crypto have dropped. Prices for consumer goods rose 8.6% year over year in May from May 2021, the highest rate of year over year inflation since 1981, which exacerbated the downward trend.
Another reason for the dip might be because most investors are worried that if inflation levels don’t start lowering soon, the US Federal Reserve may have to tighten controls by hiking interest rates at a quicker pace than they had expected. This is one of the reasons why the drop occurred. The crypto market is worth $998B at press time, a 7.35% drop in the last 24 hours.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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