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Cryptocurrencies sank Monday, helping drag the total market’s value down by $400 billion in the last week. Bitcoin and ethereum both hit lows not seen since July as cryptos tracked the slump in stocks. Altcoins are suffering even more, with solana down 40% in the last seven days after another outage. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Cryptocurrency prices slid Monday, after $350 billion was wiped off the value of the total market at the weekend, as the prospect of an aggressive Federal Reserve kept jitters alive.
Leading digital currency Bitcoin fell almost 6% in the last 24 hours to $33,561, more than 50% down from its November record high of $68,790, according to CoinMarketCap data. Ethereum suffered heavier losses of more than 10%, dropping to $2,219.
Over the weekend, the overall cryptocurrency market shed $350 billion in value, bringing its decline over the last seven days to $400 billion. It is now worth around $1.60 trillion, after peaking at close to $3 trillion in mid-November, according to CoinMarketCap.
Cryptocurrencies suffered big declines last week as they followed stock markets lower, buffeted by concerns about the prospect of a series of interest-rate hikes by the Federal Reserve this year. Bitcoin and ethereum dropped 22% and 32% respectively over the last seven days.
Higher rates tend to weigh on more speculative assets, as investors are more likely to put their cash into areas of the market that they perceive to be less risky.
“I am sure the techno sophisticates, the crypto bros, and the early Meta adopters wandering around in headsets wondering where everyone else is will try to re-boot, but this looks like a crash for now, even before we get to regulatory blue screens of death,” Michael Every, global strategist at Rabobank, said in a note.
Altcoins have seen more severe falls than the leading coins. Cardano dropped 13% over the last 24 hours to $0.97, and it has lost 36% over the last seven days. Meanwhile, solana shed 18% to reach $83.12 and logged a weekly loss of 42%.
These so-called “ethereum killers” made gains in 2021, as some analysts said ethereum was losing ground to them as a basis for decentralized finance, or DeFi, applications. But the gains have been wiped out in this latest crash.
Solana’s price tumbled as its reputation took a hit, after its network suffered its second outage in January over the weekend.
Crypto prices have followed the decline in stocks throughout January. Concerns around interest-rate hikes from the Fed and rising levels of inflation have sent shivers through the markets, with the S&P 500 down almost 10% year to date and the tech-heavy Nasdaq entering correction territory.
Investors are bracing for the Fed’s policy meeting on Wednesday to learn whether the central bank plans to get even more aggressive than the four interest-rate hikes the market expects this year, as it tackles red-hot levels of inflation.
The crypto crash could see famous bitcoin supporters lose out, with the likes of NFL stars Odel Beckham Jr. and Aaron Rodgers’ decision to take half of their salaries in bitcoin coming under renewed scrutiny.
Not all crypto enthusiasts appear worried, and noted bitcoin bull and Galaxy Digital boss Mike Novogratz took to Twitter to point out past patterns in reassurance.