Cryptocurrency prices have plummeted today, with altcoins like Cardano and Avalanche plummeting more than Bitcoin. The world’s most valuable digital token fell more than 7% to $39,416, marking the first time since March 16 that the largest cryptocurrency by market capitalization has fallen below $40,000.
Ether, the second-largest cryptocurrency by market value, was also down more than 6%, falling below $3,000 for the first time. Over the previous 24 hours, Dogecoin and Shiba Inu have lost approximately 10% of their value, while other tokens such as Avalanche, Cardano, Solana, Terra, and XRP have lost 6-11 percent of their value. According to CoinGecko, the global cryptocurrency market cap decreased 6% today to $1.93 trillion.
According to Arthur Hayes, co-founder of crypto trading platform BitMEX, Bitcoin, the most valuable cryptocurrency by market cap, might fall to $30,000 by June. He also stated in a blog post that the same mechanism might drive Ether to $2,500. “The Nasdaq 100 and Bitcoin and Ether are highly connected.” “If the NDX falls, crypto will fall with it,” he said.
Concerns about stricter monetary policy have pushed cryptocurrency prices lower. Even the enthusiasm generated by last week’s Bitcoin 2022 conference in Miami failed to halt the downward trend.
“Fed tightening by 0.5 percentage point steps at upcoming meetings, as well as a $95 billion per month balance sheet run-off, sending crypto markets plummeting lower,” said Teong Hng, CEO of Satori Research in Hong Kong.
Bitcoin’s tendency to move in lockstep with assets like US tech stocks makes the decrease less surprising after a rough week for the stock market in the United States. Its connection with the Nasdaq 100 Index has re-established new highs.
According to David Duong, head of institutional research at Coinbase Global Inc., investors are dumping cryptocurrencies ahead of the US tax deadline in mid-April, a replay of events that occurred in 2021. In a recent note, he stated, “We noticed market players selling digital assets to meet tax-related obligations last year.” Investors are also turning away from riskier investments as the Federal Reserve rises interest rates, he added.