According to data site CoinMarketCap, the crypto asset lost nearly $800 billion in market cap last month, touching a low of $1.4 trillion on Tuesday, as the end of easing monetary policy eases appetite for riskier assets. .
Bitcoin, which accounts for nearly 40% of the cryptocurrency market, hit a 10-month low on Tuesday, then bounced back to $31,450 six days after touching $40,000. It was up 54% from its November 10 all-time high of $69,000.
The price of digital assets has declined, reflecting the decline in equities on fears of aggressive interest rate hikes around the world to offset decades of high inflation. The tech-heavy Nasdaq was down 28% from its November 2021 record high.
According to CoinMarketCap, the total crypto market cap stood at $2.2 trillion on April 2nd, a far cry from its all-time peak of $2.9 trillion in early November.
“Bitcoin is highly correlated to macroeconomic conditions, which suggests that the road ahead may unfortunately be a rocky one, at least for the time being,” blockchain data provider Glassnode said in a note.
Signs of weakness in stablecoins, generally a safe crypto currency, further frightened investors. TeraUSD, the world’s fourth-largest stablecoin, lost a third of its value against the dollar on Tuesday.
Despite the decline in the price of bitcoin, funds and products associated with it posted an inflow of $45 million last week as investors took advantage of price weakness, according to digital asset manager CoinShares in a report released on Monday.
“The huge amount of liquidity has propelled some of these cryptocurrencies,” said Sebastian Galli, Senior Macro Strategist at Nordea Asset Management. He expects crypto, also related to high-growth stocks, to come under pressure as many central banks tighten their monetary policy.
This story has been published without modification in text from a wire agency feed.