Global crypto market cap plunges below $1 trillion as regulatory concerns wipeout 2023 gains

Global crypto market cap plunges below $1 trillion as regulatory concerns wipeout 2023 gains

The world of cryptocurrency is going through a turbulent phase as regulatory fears rocked the market, leading to a significant loss in the sector’s overall valuation. Major digital assets, such as Bitcoin (BTC), are among the hardest hit, paving the way for capital outflows.

In particular, as of press time on February 13, the global cryptocurrency market had dipped below the $1 trillion market cap to settle at $997.98 billion. In the past 24 hours, the sector’s market cap had peaked at $1.028 trillion, according to CoinMarketCap data.

The year-to-date graph of global crypto market capitalization. Source: CoinMarketCap

It should be noted that in recent years the market capitalization of $1 trillion has been considered a critical psychological level for investors on the potential to attract institutional actors to the space.

As things stand, market losses were led by BTC, with the flagship cryptocurrency dipping below $22,000. Notably, the latest market sentiments have invalidated Bitcoin’s desire to recover the $25,000.

bitcoin price analysis

At press time, Bitcoin was trading at $21,698 with daily losses of around 0.7%. Notably, despite the losses, the asset is still up more than 20% on the yearly chart. Bitcoin’s market capitalization stands at $418.75 billion.

Seven-day Bitcoin price chart. Source: Finbold

Ethereum (ETH), which is down nearly 10% on the weekly chart; XRP, with an 8% correction over the past seven days; and Gimbal (ADA), with corrections of more than 10% on the weekly chart.

SEC Assault Harms Crypto Momentum

Indeed, the latest crypto market correction emerged from the Securities Exchange Commission (SECOND) new attack on sector targeting staking activities. In this line, Kraken cryptocurrency exchange announced that it would discontinue its digital asset staking products in the United States and pay a $30 million settlement to the SEC over allegations that the service violated regulations.

Additionally, the SEC plans to sue stablecoin issuer Paxos, alleging that its Binance USD (BUSD) is an unregistered title. In the midst of uncertainty, crypto trading expert and analyst MichaĆ«l van de Poppe suggested that Bitcoin and the general market correction are not a major concern, tying it to the SEC’FUD‘ which caused more investors to withdraw from the market.

With concerns about inflation intensifying, investors are increasingly worried about rising interest rates, putting riskier investments such as Bitcoin under pressure. Therefore, the focus will be on this week’s upcoming inflation data for January.

Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.

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