The fall continues: the market capitalization of cryptocurrencies has already dropped below $ 900 billion

The panic caused a massive decline in the market capitalization of the cryptocurrency market

The market capitalization of the entire cryptocurrency market is at a level that has not been recorded since January 2021. Compared to the absolute peak in November 2021, it is even three times less.

It is also worth noting that at the very end of January 2021, after the initial boom in the Bitcoin price, the last really big bull run began. Today, all profits made in 2021 are burned and the price of Bitcoin is also falling below last year's lows.

In the first five full months of 2022, all cryptotrm yields were erased, with a few exceptions. The price of Bitcoin even returned to December 2020 levels with a market capitalization similar to that it had on December 26 of that year.

As for ETH, its price reached levels just before the start of the last big altcoin bull run.

Behind the massive sell-off is a general outflow of international investors from risky investments. Particularly risky investments are facing a renewed wave of sell-offs in response to Friday's release of May inflation in the US. Its rate, 8.6 percent, shocked markets, it's the highest inflation in 40 years.

International investors are thus getting rid of both stocks and cryptocurrencies.

If we exclude the year 2021 and, in the case of Bitcoin, also December 2020, levels similar to the current ones have never been reached before. Thus, the current collapse does not return the crypt market to the level of the previous bear market, but only erases the gains of the last bull run.

During the peak of the previous cycle, in January 2018, the maximum level of market capitalization of cryptocurrencies was around $ 850 billion. However, it is also worth noting that they currently have stablecoins capitalization more than $ 150 billion, while at the time they capitalized just over $ 2 billion.

So if we omit stablecoins from the numbers, the picture becomes gloomier.

For example, altcoins alone, excluding Bitcoin and stablecoins, now capitalize around $ 500 billion and in January 2018 exceeded $ 500 billion for a very short time. Therefore, the current total value of all cryptocurrencies except Bitcoin and stablecoins, in fact, returned close to the peak levels of the previous cycle. 

As for Bitcoin, the situation is different, because at the peak of the last cycle, in December 2017, it capitalized just over $ 300 billion, while today it is over $ 399 billion.

In short, investors are trying to regroup their portfolios so that inflation takes away as little as possible. The current rapid inflation is extremely difficult to beat, so investors are at least satisfied with minimizing losses. In such situations, they get rid of risky assets in the first place.

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