Crypto assets lost $800 billion in market value in a month

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May 10 (Reuters) – Crypto assets have lost nearly $800 billion in market value over the past month, hitting a low of $1.4 trillion on Tuesday, according to data site CoinMarketCap, as the end of the accommodating monetary policy reduces the appetite for risky assets.

Bitcoin, which makes up nearly 40% of the crypto market, hit a 10-month low earlier on Tuesday before rebounding to $31,450, just six days after hitting $40,000. It was more than 54% below its November 10 all-time high of $69,000.

Digital asset prices have fallen, reflecting a fall in equities over fears of aggressive interest rate hikes across the globe to stave off decades-high inflation. The tech-heavy Nasdaq (.IXIC) is down 28% from its November 2021 high. Read more

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The total value of the crypto market was $2.2 trillion on April 2, a far cry from its all-time high of $2.9 trillion in early November, according to CoinMarketCap.

“Bitcoin remains highly correlated to broader economic conditions, suggesting that the road ahead may unfortunately be rocky, at least for now,” blockchain data provider Glassnode said in a note.

Signs of weakness in stablecoins, generally a safer cryptocurrency, spooked investors even further. TerraUSD, the world’s fourth-largest stablecoin, lost a third of its value on Tuesday as it lost its peg to the dollar. Read more

Despite falling bitcoin prices, funds and related products saw inflows of $45 million last week as investors took advantage of price weakness, according to digital asset manager Coinshares in a report. report released on Monday. Read more

“A huge amount of liquidity that has inflated some of these cryptocurrencies,” said Sebastien Galy, senior macro strategist at Nordea Asset Management. He expects the crypto, also correlated to high-growth stocks, to come under pressure as several central banks tighten monetary policy.

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Reporting by Medha Singh and Sruthi Shankar in Bengaluru; Editing by Shinjini Ganguli

Our standards: The Thomson Reuters Trust Principles.

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