Crypto losses plunged Friday, with everything from Bitcoin, Ether to Solana setting or approaching year lows.
Crypto losses plunged Friday, with everything from Bitcoin, Ether to Solana setting or approaching year lows.
The MVIS CryptoCompare Digital Assets 100 Index, a market capitalization-weighted metric that tracks the performance of the 100 largest tokens, fell 4.9%, bringing the year-on-year decline to nearly 50%. Bitcoin, which makes up nearly half of the index, has fallen for the fourth day. Ether, which accounts for about 18%, broke its previous low in early May following the collapse of the Terra blockchain. Popular DeFi tokens like Solana and Cardano fell even more.
“We are entering a crypto winter,” said Paul Veradittakit, a partner at Pantera Capital Management. “Capital will merge with larger cap coins like BTC and ETH for the time being.”
Investors are increasingly saying that the market is in the middle of a crypto winter, as long periods of decline have been known over the years. Last week, Gemini Trust, run by the Winklevoss brothers, laid off 10% of its staff, citing worsening market conditions. Coinbase Global Inc., the largest in the US electronic money exchange, stop hiring and cancel some job offers.
While crypto prices have been falling since early November, when Bitcoin hit an all-time high, the drop accelerated following the collapse of stablecoin TerraUSD (UST) and related cryptocurrency Luna that resulted tens of billions of dong in loss of market value.
The market is also digesting bad economic news, affecting tech stocks – with which many have shown correlations – particularly hard. Data released on Friday on US consumer prices showed inflation continued to rise rapidly.
“The only event that matters to the market this week is the CPI, and the data again proves inflation remains unchecked, leading to higher interest rates, a stronger dollar, stock prices and digital assets fall as investors continue to increase the probability, said Jeff Dorman, Chief Investment Officer at Arca.
