The combined bitcoin and cryptocurrency market has lost around $1 trillion since November in a crypto price crash that’s caused turmoil for traders.
The bitcoin price has crashed from a peak of almost $70,000 per bitcoin less than two months ago to lows of just over $40,000 today—a decline of around 40%. Meanwhile, other major cryptocurrencies ethereum, Binance’s BNB, solana, cardano and XRP have all lost a similar amount.
The crypto market’s decline from $3 trillion to $2 trillion, as measured by CoinMarketCap, comes after a period of huge growth for cryptocurrency prices that saw the market swell from just $200 billion two years ago—and bullish traders are convinced this latest crash is only a temporary setback.
“Although sharp, the most recent pullback in the digital asset market was by no means unexpected,” Mikkel Morch, executive director of risk management at crypto hedge fund ARK36, said in emailed comments. “Previously, we warned that uncertainty in the markets and weak technical fundamentals made a drop to low $40,000 levels entirely possible.”
“[Bitcoin has] broken its recent stock market correlation, missing out on the end of 2021/start of 2022 equity rally,” Nicholas Cawley, strategist at DailyFX, said via email. “Looking ahead, if bitcoin makes a confirmed break below the December 4 low around $42,000, then a cluster of late-September lows between $39,600 and $40,700 come into play.”
The latest crypto price crash, wiping billions of dollars from the bitcoin and crypto market in a matter of hours, came after it was revealed the U.S. Federal Reserve could accelerate its planned 2022 interest rate hikes and begin shrinking its massive balance sheet—something that weighed on equity markets as well.