The Cryptocurrency Market Loses 55% Of Its Capitalization As Bitcoin Crashes Below $24,000.

The 2022 cryptocurrency market catastrophe is accelerating, with Bitcoin (BTC) leading the way in terms of capital outflow.

According to CoinMarketCap data, the global crypto market capitalization was $964 billion as of June 13, down from $2.16 billion on January 1, a loss of more than 55% or $1.19 trillion.

The cryptocurrency sector began the year following a successful 2021, with total market capitalization reaching an all-time high of around $3 trillion in November. The market cap was last less than $1 trillion in early 2021.

The majority of the losses have escalated this week, with the crypto market erasing roughly $280 billion in just seven days.

Bitcoin has led the majority of market withdrawals, with BTC falling to a yearlong low of less than $24,000. By press time, the flagship cryptocurrency was trading at $23,700, a drop of more than 13% in the previous 24 hours.

Notably, the price movement of Bitcoin is known to have an impact on the overall market. According to crypto experts, the present cycle of volatility is normal, and Bitcoin is expected to recover, bringing the rest of the market with it.

Some experts believe Bitcoin will fall further, possibly to below $20,000, before resuming its bull run.

The volatility of the cryptocurrency market has also hurt other blockchain stocks. For example, in pre-market trading on June 13, Marathon Digital Holding (NASDAQ: MARA), Riot Blockchain (NASDAQ: RIOT), and Coinbase (NASDAQ: COIN) all had large declines of 13.7%, 12%, and 12%, respectively.

For the better part of 2022, the crypto market has been operating in a high inflation environment with the threat of Federal Reserve interest rate hikes.

However, the immediate cause of the market falling below $1 trillion appears to be a major sell-off as US inflation reached a record 8.6%. The market is also anticipating a possible interest rate hike as a result of rising inflation.

In an inflationary atmosphere, investors are likely to be cautious when dealing with riskier assets, and cryptocurrency is a volatile product in general. As a result, the current environment may signal a decrease in risk appetite among investors.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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