The broader crypto market is bleeding out, with almost every token registering massive losses. In the past 24 hours, the total crypto market capitalization has gone from nearly $2 trillion to $1.15 trillion, fueled by panic selling as investors race to stave off losses.
Bitcoin Tumbles to 16-Month Low
Battling an uptick in inflation and Terra’s UST implosion, the value of Bitcoin (BTC) has plummeted below $27,000 — its lowest level since December 2020. Over the last seven sessions, BTC has lost 32.1% of its value, breaking multiple key support levels.
While BTC was hovering around the $31,000 mark earlier this week, with investors awaiting the U.S. CPI data. The value of BTC dropped to lows of $28,000 within minutes after the data arrived higher than expected. At the same time, the newly published U.S. inflation data also triggered a landslide across the traditional stock market.
Given that BTC’s correlation with the U.S. stock markets is at an all-time high, losses in equities spilled over, pushing Bitcoin even lower. The final push came from the Terra blockchain’s implosion in value, as its algorithmic stablecoin lost its dollar peg and its native token dipped by almost 98%. Overall, things aren’t working out well for the legacy token, as paranoid investors are gripped by “extreme fear” per the Crypto Fear and Greed Index.
That said, institutional sentiment towards BTC has shifted, resulting in a surge in inflows for the first time in many weeks. Over the past week, BTC witnessed inflows as high as $45 million from institutional investors.
Likewise, the 24-hour trading volume of BTC has also jumped by 56.64%, indicating that investors are capitalizing on the declining value of cryptocurrencies.
A Sea of Red Encircles the Market
Every token, be it the prominent ones or the lesser-known ones, has met with the same fate this week, losing significant value in the blink of an eye. Ethereum (ETH), the largest altcoin by market capitalization, has dipped by a staggering 37.9% over the last seven sessions.
The total value locked (TVL) in Ethereum-based DeFi protocols also nosedived from $108 billion at the beginning of the week to $72.74 billion, primarily due to plummeting LUNA and UST tokens.
Altcoins really started to tumble after Terra’s algorithmic stablecoin, UST, lost its dollar peg, crashing to lows of $0.30. This “unusual dip” negatively affected the value of Terra’s native token LUNA, which took a toll on the crypto and DeFi markets.
LUNA, which ranked among the top 10 cryptocurrencies by market capitalization as of last week, lost 98% of its value, and now ranks 64th in terms of market capitalization.
The historic UST “de-pegging” has sent shockwaves across the entire market. ApeCoin (APE) registered significant losses this week. While the token had mostly outperformed in previous weeks, it has since lost around 70% of its actual value since the Otherside Metaverse mint catastrophe.
Other altcoins have also suffered devastating double-digit losses over the past seven sessions, sparking nearly $1 trillion worth of crypto losses. Binance Coin (BNB), Solana (SOL), Cardano (ADA), Polkadot (DOT), Avalanche (AVAX), Near Protocol (NEAR), Cosmos (ATOM), Algorand (ALGO), VeChain, and Elrond (EGLD) are among the well-known tokens that have lost nearly 50% of their values.
Tron Ecosystem Stands Strong
While the entire cryptosphere faces steep losses, TRON has managed to outperform the broader market amid the chaos. TRON is among the only tokens to have registered minimal losses this week, with its 24-hour trading volume recording an impressive 102% surge.
Despite giving up around 14% of its value over the past seven sessions, TRON has risen 25% over the past 30 days. The main driver of the token’s momentum higher has been the platform’s recent launch of the first-ever decentralized stablecoin USDD. Other stablecoins such as USDT, USDC, and BUSD have shown minimal deflection amid the ongoing dump.
Global Crypto Adoption Still Climbing
Amid the crypto carnage, Latin American digital bank Nubank has revealed that it will soon offer BTC and ETH investment services to its 50 million customers.
To that extent, Nubank has entered into a strategic partnership with Paxos to enable its users to buy, sell, and store cryptocurrencies. In addition, Nubank has also clarified that it will allocate 1% of its net assets to purchase BTC via Nu Holdings, the company that controls the Nubank Group.
In other adoption news, CBOE Australia has confirmed that Australian investors will be able to invest in spot crypto exchange-traded funds (ETFs) starting May 12, 2022.
These include a BTC ETF from Cosmos Asset Management, and two BTC and ETH spot ETFs from 21Shares.
Last but not least, SBI Motor Japan, a subsidiary of SBI Africa, has begun accepting BTC and XRP payments for its used cars, with more tokens to be added in the coming months.
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