Last Saturday, Bitcoin fell to $17,749 and Ethereum dropped to around $897 as cryptocurrency holders rush to get rid of depreciating assets. Over the past week, the two most popular cryptocurrencies on the market have fallen by more than 35%, continuing to overcome psychological barriers. Bitcoin last traded at this low around December 2020.
Cryptocurrencies rose slightly on Sunday, with Bitcoin currently trading at $18,300 and Ethereum at $960. Bitcoin peaked in November at $68,789.63. In the same month, the price of Ethereum rose to an all-time high of $4,891.70.
Experts explain the collapse of the cryptocurrency market, which fell below 1 trillion for the first time since the beginning of last year, with macroeconomic factors. These include rising inflation and a string of rate hikes by the US Federal Reserve. Four days ago, the Fed raised the base interest rate by 75 basis points – to the level of 1.5-1.75% per annum.
Cryptocurrency companies are now looking to cut costs as much as possible as investors abandon the riskiest assets, reducing trading volumes. Singapore-based exchange Crypto.com recently announced a 260 staff cut, or 5% of its staff, while Gemini announced a layoff of 10% of its staff. In turn, the crypto exchange Coinbase announced that it was laying off almost a fifth of its staff due to the volatility of cryptocurrencies.
The fall in the cryptocurrency market is showing no signs of slowing down yet, as the Bitcoin and Ethereum sell-off continued into Saturday. This is due to the fact that hedge funds and cryptocurrency companies have faced the problem of insolvency.
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