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    Gate.io Blog Crypto Market Loses More Than $200 Billion In A Day

    Crypto Market Loses More Than $200 Billion In A Day

    24 June 15:38

    [TL; DR]

    Cryptocurrencies are volatile and unregulated.

    There are no limits to how the crypto tokens can rise or fall.

    It is shocking that the crypto market estimated to be worth about $3 trillion in November 2021 could fall to about $1.3 trillion in June 2022.

    In 24 hours, the crypto market lost about $200 billion due to the massive sell-off by major crypto investors.

    Investors' sell-off was due to the soaring inflation and rising interest rates.

    The effects of the sell-off saw the drastic drop of Ethereum’s price value from $69,000 to an all-time low of $25,401.

    The direct effect on Ethereum made the price go from over $2000 to $1,704. 05.

    A prominent stable coin, Terra USD, also fell below its dollar equivalent to about 30 cents.

    The loss of over $200 billion and the ongoing decline in the crypto market could be traced (largely) to the aftermath of the coronavirus pandemic.

    Keywords: crypto, market, investment, investors, sell-off, price, value.

    [Full Article]

    Cryptocurrency is volatile, and no matter how high it rises, the price value can drop below the estimated benchmark.

    In recent times, the crypto market has witnessed a sharp decline and a drastic fall in the price value of all tokens. Those badly hit are the major crypto tokens such as Bitcoin (BTC) and Ethereum(ETH).

    There are several reasons behind these sharp declines, and most of these factors are inevitable and beyond the control of the crypto market.

    This article will focus on how the crypto market lost about $200 billion daily.

    The Sell-off That Led To The Loss Of Over $200 Billion

    In November 2021, the market value of cryptocurrencies was estimated to be above $3 trillion. By Mid-April 2022, the value fell to about $2 trillion, and as of the first week of June 2022, the value of the crypto market has fallen to about $1.3 trillion.

    It is shocking to know that in 24 hours, the crypto market lost about $200 billion. You can now imagine what factors or market forces could be behind these drastic drops in the value of cryptocurrencies.

    At the moment, the main reason that led to the loss of over $200 billion worth of cryptocurrencies is the massive sell-off by investors. Due to soaring inflations and rising interest rates, major crypto investors decided to sell their digital assets and yank their money from riskier investments.

    The sell-off was necessary because these investors had invested heavily in the crypto market. As the price value of these assets was declining drastically, they had to yank off their money before it all went down the drain.

    Every decision or action in the crypto market is bound to be a reaction. The reaction could either be soar in the price value of crypto tokens or a sharp decline. As for the massive sell-off by investors, the reaction is enormous.

    Effects Of The Cryptocurrency Sell-Off

    Image: Business Standard

    The major effect of the sell-off by investors is the drastic fall in the price value of major crypto tokens. Some of them include;


    Bitcoin is the world’s largest cryptocurrency, and it was the most hit of all cryptocurrencies after the sell-off. The price value dropped to $25,401, the lowest since December 2020. You wouldn’t know the enormity of the fall until you realize that the same Bitcoin rose to about $69,000 in November 2020.

    For the first time in sixteen months, Bitcoin fell below $26,000 and was a significant part of the crypto sell-off. The same sell-off wiped over $200 billion from the market in less than 24 hours.

    As of June 2022, Bitcoin has recovered and is currently trading at about $28 569.

    Ethereum (Ether)

    Ether is the second-largest crypto token affected by the sell-off, and it also accounted for some of the $200 billion lost in less than 24 hours.

    Ether went front over $2000 to $1,704. 05. Even though the drop seems a bit minimal compared to that of BTC, the decline is the first time the price value of Ether is dropping below $2,000 since June 2021.

    Stablecoin Protocol (Terra USD/ UST)

    Another token that the sell-off affected is the stablecoin protocol called Terra. A unit of Terra is supposedly equivalent to the value of a dollar.

    That is, one Terra is worth 1 USD. However, the stablecoin plummeted to less than 30 cents.

    This singular event signaled the downfall of the crypto market and the loss of confidence in what investors felt would bounce back as no one envisaged that the stable coin could fall below their dollar equivalents.


    Image: CoinMarketBag

    Finally, the effect of the coronavirus pandemic still lingers on and is among the causes of inflation across the globe. The stock markets have plunged amidst fear of soaring prices of commodities and a deteriorating economic outlook.

    It is, therefore, suitable for the Central Banks across the world to tighten monetary policies that will, in turn, control inflation and solve all these economic issues.

    Some of the proposed measures are the increase in the interest rate by the Federal Reserve. While these measures are expected to help control the economy, they directly affect the cryptocurrency economy.

    Due to these government policies, investors are pressured to sell off their investments in digital assets. The immediate effect of the sell-off is the loss of over $200 billion in crypto assets in 24 hours.

    Experts and industry players opine that the $200 billion wiped off the crypto market will be regained as soon as the larger economy returns to normal. Even though it will take a lot of time, those who are yanking off their investment from crypto might make a recovery slower than envisaged.

    Author: Valentine. A, Gate.io Researcher

    This article represents only the researcher's views and does not constitute investment suggestions.

    Gate.io reserves all rights to this article. Reposting of the article will be permitted, provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.

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