- Cryptocurrencies slumped further Thursday and have lost more than $500 billion in market capitalization since last week.
- The total crypto market cap is down 28% from a week ago at $1.2 trillion amid a broader meltdown.
- The latest dive puts the market cap at the lowest point for since July 2021.
Cryptocurrencies continued to drop Thursday, extending a meltdown that has seen the total market capitalization for tokens falling 28% over the last week to $1.2 trillion, the lowest since July.
That means more than $500 billion in market value has vanished in the past week, with the last 24 hours alone seeing a $200 billion loss. Digital assets continue to struggle to unlink from traditional risk assets that are falling on interest rate hikes and soaring inflation.
"It has been a rough period for crypto given the lost confidence with stablecoins and expectation for a much harsher regulatory environment," said Edward Moya, senior market analyst at OANDA.
Bitcoin, the largest cryptocurrency by market capitalization, fell below $30,000 on Monday and briefly dipped below $26,000 on Thursday. Bitcoin is now settling at a support level around $28,000, down from its all-time high of $69,000 seen in November 2021.
Turmoil in stablecoins, some of which are backed by liquid cash while others are algorithmic, added to the crypto crash after Terra lost its dollar peg.
"Full capitulation of the selloff for risky assets is entering its last stage, so that should suggest that Bitcoin might be subject to one last major plunge before big money decides to buy the dip," Moya said.
Other analysts also said the latest crypto slide is another opportunity for "big money" to come back to risk assets to buy the dip.
"The markets are in meltdown but this may present an opportunity for institutional players to start building positions and push stablecoin regulation to provide more confidence," said Martha Reyes, head of research at BEQUANT, a digital asset exchange and brokerage.