Crypto selloff continues as investors remain bearish
By Robert Davis
17:39, 10 January 2022
Last week’s cryptocurrency selloff continued Monday as bitcoin briefly dropped below the $40,000 per unit mark by 14:30 UTC.
The move pushed the broader cryptocurrency market lower as well. Over the past week, other popular assets like ethereum, solana, and polkadot all lost more than 18% of their value.
The decline has also corresponded with a nearly $300bn (£221bn) decrease in the total market capitalisation, according to trading data from Binance’s CoinMarketCap.
The total crypto market cap currently stands at over $1.9trn, the lowest point since the end of September 2021, with bitcoin accounting for $778bn or 40% of the total.
Total Cryptocurrency Market Cap – Chart: CoinMarketCapImpact on digital asset products
Digital asset products have also felt the impact from bitcoin’s tumble as investors remain bearish. Last week saw a record $207m (£152.55m) of outflows from these products, according to the latest fund flows report from CoinShares.
Bitcoin’s outflows totalled $107m last week, which analyst James Butterfill said is likely “a direct response to the FOMC which revealed the US Federal Reserve’s concerns for rising inflation.” The FOMC, or Federal Open Market Committee, is the Federal Reserve’s policy making body. Minutes from the FOMC's December meeting indicated the US central bank intends to raise interest rates this year to combat rising inflation.
Ethereum’s outflows totalled $39m last week, bringing its five-week outflow total up to $200m, CoinShares said.
Investment products like the ProShares Bitcoin Strategy ETF and the Grayscale Bitcoin Trust have both felt the additional market pressures, falling by 12% and 15% over the last week, respectively.
According to ProShares’ website, a $10,000 investment in its bitcoin ETF from October 2021 is worth approximately $6,600 today.
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NFT bull market?
There are some signs of life still in the market, despite its sanguine stance over the past seven days.
According to a recent note from analyst Teng Yang, nonfungible token (NFT) transaction volumes on Ethereum jumped more than 70% last week, a level not seen since August 2021.
OpenSea captured more than 90% of the traffic following the platform’s announcement that it secured more than $300m in funding at a $15.5bn valuation.
Read more: AMC offers new NFT to shareholders
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