The seven-month-long crypto bear market has taken a toll on virtually all digital assets. Almost all the cryptos in the top 100 by market capitalisation are now down 90% or more from their respective peaks.
To put this in a clearer perspective, the total digital asset market cap hit $3 trillion in November 2021, it has now fallen over 70% from that height, now at $896 billion, according to data from Coinmarketcap at press time.
Cryptos are 90% down
The vast majority of cryptocurrencies have taken a big hit. According to data from price aggregator CoinGoLive, 13,240 or 98.5% of the 13,436 cryptocurrencies in existence are currently down 90% from their all-time highs.
Out of the 196 coins that have retraced less than 90% from their highs, 19 are stablecoins, meaning the exact percentage is slightly higher.
There is an indicator that tokens with large market capitalisation have fared better than others. Among the top ten cryptocurrencies by market cap, only one has dipped 90%, which is $XRP, the others are down within 64-85%.
Flagship digital asset, Bitcoin has plunged 70.30% from $69,000 in November 2021, while ETH is down 78.07% from $4,878.
Binance Coin (BNB) is proving to be the most resilient of them all, with ‘just’ 68.77% decrease from its ATH of $686.31 a year ago.
Some of the coins in the top 100 that are badly hit, and now close to zero are $EOS 95.89%, $ICP – 99.22% $BCH – 96.96% $HOT – 93.43%, $SNX 93.87%, $DASH 97.10%, $WAVES 92.09%, $FTM 93.11%, $NEO 95.42, KLAY 94.44%, $GRT $96.52%, $IOTA 94.95% $Zcash 98.04% and so many others.
The only asset class that hasn’t suffered a significant drawdown in market capitalisation is stablecoins. Despite the blowup of Terra’s $UST, the current total market capitalisation of stablecoins is around $156.5 billion, not much lower than its record size.
Immediate cause of crypto crash
The probable cause for cryptos crashing is heightened fears of inflation and pausing of withdrawal by crypto lending service Celsius. Investors are also continuing to stay away from riskier assets, which is reflecting in the stock markets as well.
Experts argue that the crypto price plunge indicate a falling risk appetite of investors.
Investors’ sentiment is now “extreme fear,” according to the Crypto Fear and Greed Index.
In another argument, the decline is being attributed to comments made by Bill Gates on Reddit, in which the Microsoft founder said: “I like to invest in things that have value. The value of companies is based on how well they make great products. The value of crypto is just based on what one person decides how much another person will pay for it.”
According to Market Watch, “some analysts expect the slide to continue.”
The current bear market has exposed a painful reality: the majority of cryptocurrencies eventually lose practically all of their value.
With the 41-year record high inflation rate, and harsh monetary tightening policies by central banks globally, there seems to be no end in sight for the current crypto downturn.
However, Mr. Dorman, the chief investment officer at Arca, said his firm is maintaining a higher cash balance but isn’t afraid to put money to work for good opportunities.
“As long-term investors, we are looking for things that, in the next 12 to 36 months, we believe will be trading significantly higher than where they are trading today,” he said.
Bitcoin is trading at $20,568.91, as at press time, down 3.32% and you wonder how further down it go.
Ethereum is at $1,078.69, down 3.66% at press time.
Analysts can only make projections, the realities of the crypto markets are before us.