The value of the cryptocurrency market on June 13 fell below $1 trillion for the first time since January 2021, according to data site CoinMarketCap, reaching as low as $926 billion.
The global cryptocurrency market peaked at $2.9 trillion in November 2021, but it has faltered so far this year. It has lost $1 trillion in value in the last two months alone as investors ditched riskier assets in the face of high inflation and fears that interest rate raises by central banks will hamper growth.
The largest cryptocurrency, bitcoin, was down more than 10% on the day, falling to an 18-month low of $23,750. It is down by around 50% so far this year. Smaller coin ether fell over 15% to $1,210.
“As inflation proves to be an even trickier opponent to beat than expected, Bitcoin and Ether are continuing to get a severe bruising in the ring,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“They are prime victims of the flight away from risky assets as investors fret about spiralling consumer prices around the world.”
## Bitcoin crashes
Meanwhile, Bitcoin tumbled on June 13 to an 18-month low under $25,000 as investors shunned risky assets in the face of a vicious global markets selloff, months after the cryptocurrency hit a record high.
The unit took a heavy knock also from news that cryptocurrency lending platform Celsius Network paused withdrawals, citing volatile conditions.
World stock markets have plunged since Friday when data showed US inflation at a fresh four-decade high, increasing recession fears and sending investors running for safer assets like the dollar.
“It is not very surprising to see such a strong downturn as we have noticed an increased correlation over the last few years between traditional stocks, which have also tanked recently, and the cryptocurrency market,” noted XTB chief market analyst Walid Koudmani.
The world’s most popular cryptocurrency dived about 10 percent to hit $23,794 in morning London deals, striking a level last seen in December 2020.
The virtual unit has collapsed by 65 percent in value since striking a record peak $68,991.85 in November.
Investors on Monday sought safety with the US central bank seen likely to aggressively ramp up borrowing costs further to combat runaway inflation.
Bitcoin’s decline accelerated after the news from Celsius Network.
“Today we are announcing that Celsius is pausing all withdrawals, swap, and transfers between accounts,” the platform said in a statement.
Celsius made the move “due to extreme market conditions”, it added.
The total value of customer deposits had already shrunk by more than half to under $12 billion in May compared with the end of last year.