The Cryptocurrency Market Cap Drops to $1.5T

The Cryptocurrency Market Cap Drops to $1.5T

Cryptocurrency
March 6, 2022 by Diana Ambolis
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Following Russia’s Attack on Ukraine on Thursday, the cryptocurrency market fell 9%, with some analysts stating that the asset class remained a high-risk proposition. The capitalization of all cryptocurrency markets fell as low as $1.5 trillion in 24 hours, losing nearly 9%, as Russia launched a “special military operation” against Ukraine. Global economic concerns also
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Following Russia’s Attack on Ukraine on Thursday, the cryptocurrency market fell 9%, with some analysts stating that the asset class remained a high-risk proposition.

The capitalization of all cryptocurrency markets fell as low as $1.5 trillion in 24 hours, losing nearly 9%, as Russia launched a “special military operation” against Ukraine. Global economic concerns also weighed heavily on broader financial markets. The Stoxx 600 Europe index fell more than 3%, micro Nasdaq 100 futures fell 2.3 percent, and Russia’s MOEX equity index fell a record 28%.

Bitcoin fell 8% in the last 24 hours, reaching $34,725 in early Asian hours. The fear and greed index – a gauge of public sentiment toward the cryptocurrency market – fell two points to a “fear” reading of 23.

“The aggravation of tension around Ukraine exerted pressure on risky assets,” said Alex Kuptsikevich, a financial analyst at FxPro, in an email. “There are growing risks of escalation associated with the introduction of Russian troops into Donbass. In such a situation, risky assets may continue to decline further.”

Also, read – Russian invasion drops Singapore and Taiwan interest in Cryptocurrency.

Donbass refers to two Ukrainian breakaway regions controlled by separatist groups.

Cryptocurrency market decline demonstrates that the sector remains a nascent asset class compared to traditional markets, Kuptsikevich said. “We see that cryptocurrencies are outperforming developed world stocks, demonstrating the risky nature of these assets and their inability to serve as a substitute for gold.”

Liquidations, or losses on crypto-tracked futures, topped $250 million during the early Asian hours, as major cryptocurrencies fell more than 10%. In the last 24 hours, ether has lost 13% of its value, while Cardano’s ADA and Solana’s SOL have lost up to 16%.

According to metrics tracked by analytics tool Glassnode, investors, on the other hand, continue to hold bitcoin. Despite the decline in prices, long-term investors’ wallets had record volumes of BTC at 76.5 percent as of Thursday morning, implying that some investors are still nurturing the purported hedging capabilities of the world’s largest cryptocurrency.