Crypto Market Crashing
The crypto market is crashing, with Bitcoin, Ethereum, and Ripple prices in a steep bear market, down over 50% from their highest points last year.
A crypto market crash is accelerating this year, with Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) and Ripple (CRYPTO: XRP) prices being in a steep bear market after falling by over 50% from their highest points last year.
The market capitalization of all tokens has slumped from a peak of $4.2 trillion to $2 trillion.
Crypto Market Crashing Amid Rotation to Stocks A key driver behind the accelerating weakness in the crypto market is that investors in major economies such as the United States, South Korea, and Japan are rotating into equities, as stock markets surge amid the ongoing AI supercycle.
This rotation is also happening as crypto investors start to capitulate after years of underperformance.
A good example of this is the ongoing performance in the ETF market.
Spot Bitcoin ETFs have shed over $6 billion in the last two months, while funds tracking stocks have added over $1 trillion.
The Roundhill Memory ETF (DRAM) has added over $24 billion since its launch in April.
Therefore, traders who used to push the crypto market higher have largely pivoted to equities, where top stocks are soaring.
For example, a company like Sandisk (NASDAQ: SNDK ) has soared by over 4,500% in the last 12 months.
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These woes have increased amid the ongoing sell-off in their preferred stocks like SATA, STRC, and BMNP.
Investors now fear that these companies will be forced to start selling their crypto assets to fund their dividends this year.
If this happens, there is a risk that cryptocurrencies will continue falling as the biggest buyers become sellers.
Crypto Confidence Waning Amid Hackings and Fraud The crypto market crash is also happening because of the lack of confidence in the industry.
These fears escalated on October 10 last year when the crypto industry suffered over $18 billion in liquidation losses.
1.6 million traders were liquidated.
At the same time, fraud and pump-and-dump schemes have been on an upward trajectory.
A good example of this is President Donald Trump ’s decision to launch the a meme coin in January last year.
After initially pumping, the token crashed, erasing billions of dollars in value.
Other recent examples of pumps and dumps are coins like Humanity Protocol, Audiera, and SKYIE.
Data shows that crypto hackings have soared this year.
According to DeFi Llama, hackings have jumped to over $1.4 billion in the last 12 months.
This includes popular networks like Polymarket, Drift Trade, Balancer, and Upbit.
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