Crypto Markets Turn Red as $200 Billion Exits The Space

Crypto Markets Turn Red as $200 Billion Exits The Space

The total market capitalization for the digital asset industry has slumped 6.9% over the past 24 hours. The losses have accelerated during the Thursday morning Asian trading session when the market cap fell below $2.1 trillion for the first time in more than three months.

The big dump has resulted in a whopping $200 billion exiting the crypto market according to Tradingview.

Total market cap hit an all-time high of just over $3 trillion on Nov. 9, but it has now retreated 30% from those lofty levels. It is too early to call it a bear market with a correction of this size as markets are still up around 120% from the same time last year.

Crypto Majors Leading Losses

Bitcoin is the pied piper when it comes to crypto markets, when it falls, the rest follow. BTC has dumped 6.3% on the day in a fall to $43,370 at the time of writing. The asset is now trading 37% down from its own all-time high of $69K on Nov. 10 and is at its lowest level since late September. The $40K zone is a key level to watch for support and a potential bounce.

The world’s second-largest crypto asset, Ethereum, is also in pain today slumping 7.6% over the past 24 hours to $3,520 at the time of writing. The price of ETH is now 28% down from its all-time high in November which could be seen as a healthy correction providing there are no further losses.

Other crypto assets deep in the red this morning include Binance Coin (BNB) down 8.4% to $470, Solana (SOL) dumping 10% in a slide to $150, Cardano (ADA) and Ripple (XRP) dropping 7% apiece, and Polkadot (DOT) sliding a painful 10.5% on the day.

There are no survivors from today’s crash, and even some of the stablecoins have decoupled from their pegs temporarily.

FED Behind The Crash?

Crypto markets are volatile by nature and an intraday slump such as this is quite common. However, there may have been a few factors at play having influences over the markets.

The U.S. Federal Reserve’s December meeting minutes confirmed that the central bank has started to put the brakes on stimulus efforts with interest rate hikes planned for this year. The hawkish shift caused global stock markets to see red in late trading on Wednesday, and the downturn has continued across Asian markets on Thursday morning.

Global Chief Investment Officer at Guggenheim Partners, Scott Minerd, commented that it is the “recipe for a financial accident.”

Fed minutes much more hawkish than I'd expected. #Fed seems intent on raising rates and shrinking the balance sheet simultaneously. Clearly the recipe for a financial accident.— Scott Minerd (@ScottMinerd) January 5, 2022

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